Houston-based MRC Global — No. 9 on Industrial Distribution's Big 50 List — reported its 2016 Q4 and full year fiscal results on Friday, led by a considerable rebound in sales and profit after two straight years of declines.
The company posted Q1 sales of $862 million, up 10.1 percent year-over-year, and up 20.0 percent sequentially from Q4 2016 as customer activity in the midstream sector drove improvement. The company had previously posted a year-over-year sales decline of at least 20 percent in each quarter beginning with Q2 2015, including a 26 percent drop in Q4 2016.
MRC Global posted a zero profit this past quarter, which likewise was a major improvement compared to recent performance over the past year. In 2016, MRC took losses of $14 million (Q1), $17 million (Q2), $48 million (Q3) and $24 million (Q4). It had a loss of $399 million in Q4 2015, but that included an impairment charge of $475 million, and adjusted profit of that quarter was $12 million.
"We are confident the recovery in the oil and gas market is underway with first quarter 2017 revenue higher than any quarter in 2016," said MRC president and CEO Andrew Lane.
MRC's Q1 2017 gross profit increased $7 million year-over-year to $140 million, or 16.2 percent of sales, while selling, general and administrative expenses decreased 8 percent.
By geography in Q1:
- U.S. sales of $666 million — 77.3 percent of total — increased 10.0 percent year-over-year
- Canada sales of $77 million increased 20.3 percent year-over-year
- International sales of $119 million increased 5.3 percent year-over-year
By product line in Q1
- Valves, automation, measurement and instrumentation sales of $322 million — 37.4 percent of total — increased 76.9 percent year-over-year
- Line pipe sales of $146 million increased — 16.9 percent of total — increased 10.6 percent year-over-year
- Gas products sales of $134 million — 15.5 percent of total — increased 32.7 percent year-over-year
- Carbon steel fittings and flanges sales of $123 million — 14.3 percent of total — increased 2.5 percent year-over-year
- Stainless steel and alloy pipe and fittings sales of $41 million — 4.8 percent of total — decreased 14.6 percent year-over-year
- Other sales of $96 million — 11.1 percent of total — increased 15.7 percent year-over-year
By business sector in Q1
- Upstream sales of $245 million — 28 percent of total — increased 6 percent year-over-year. The increase was primarily to MRC's Canadian segment. Excluding the company's divested Oil Country Tubular Goods business, U.S. upstream sales increased 24 percent and International sales decreased 17 percent.
- Midstream sales of $371 million — 43 percent of total — increased 33 percent year-over-year. Sales to transmission and gathering customers were up 48 percent, while sales to gas utility customers wer eup by 20 percent.
- Downstream sales of $246 million — 29 percent of total — decreased 10 percent year-over-year. U.S. downstream sales decreased by 15 percent, primarily due to the conclusion of a large petrochemical project. Sequentially, U.S. sales increased 8 percent from Q4 2016.
