MRC Global (MRC) Q2 Earnings Top Estimates, Revenues Down Y/Y

Core Viewpoint - MRC Global Inc. reported a decline in adjusted earnings and revenues for the second quarter of 2024, primarily due to lower sales volumes in key sectors, despite beating earnings estimates [1]. Revenue Summary - Total revenues for the second quarter reached $832 million, exceeding the consensus estimate of $822 million, but reflecting a 4.5% year-over-year decline [1]. - Revenues from carbon pipe, fittings, and flanges decreased by 4.9% year over year to $235 million [2]. - Valves, automation, measurement, and instrumentation revenues increased by 1% year over year to $302 million [2]. - Gas product revenues fell by 9.8% year over year to $193 million, while general product sales dropped by 10.7% to $67 million [2]. - Sales of stainless steel and alloy pipe and fittings decreased by 2.8% to $35 million [2]. Sector Performance - Revenues from Gas Utilities decreased by 11.6% year over year to $287 million, while DIET sales increased by 9.4% to $268 million [3]. - Sales from the PTI sector declined by 8.6% year over year to $277 million [3]. Segment Analysis - The U.S. segment, accounting for 81.4% of total revenues, generated $677 million, down 6.9% year over year due to reduced demand in Gas Utilities and PTI sectors [4]. - Revenues from the Canada segment fell by 13.2% year over year to $33 million [4]. - The International segment saw a revenue increase of 15.9% year over year to $122 million, driven by higher revenues from PTI and DIET sectors [4]. Margin Profile - MRC Global's cost of sales decreased by 5.3% year over year to $659 million, with adjusted gross profit down 1.6% to $184 million [5]. - The adjusted gross margin improved to 22.1% from 21.5% in the previous year [5]. - Selling, general, and administrative expenses decreased by 3.1% year over year to $126 million, while adjusted EBITDA increased by 3.2% year over year to $65 million [5]. Balance Sheet and Cash Flow - At the end of the second quarter, MRC had a cash balance of $49 million, down from $131 million at the end of December 2023 [6]. - Total debt at the end of the reported quarter was $152 million [6]. - In the first half of 2024, the company generated net cash of $101 million from operating activities, compared to $10 million used in the same period last year [7]. - Capital expenditures on property, plant, and equipment rose by 180% year over year to $14 million [7]. - Dividends paid on preferred stock remained flat year over year at $12 million [7].