MRC Global Plunge 8% As Q4 Results Miss Estimates

(RTTNews) - Shares of MRC Global, Inc (MRC) plunged nearly eight percent in extended trading on Thursday after the energy industry products and services provider reported results for the fourth quarter that missed analysts' expectations.

However, the company posted a profit for the quarter that increased from last year, despite lower gross margin, reflecting double-digit revenue growth and lower expenses.

"We had a good fourth quarter in light of the falling oil prices during the quarter. Fourth quarter revenue of $1.512 billion and adjusted EBITDA of $102 million was the second best fourth quarter in the company's history surpassed only by 2008," Chairman, President and CEO Andrew Lane said in a statement.

The Houston, Texas-based company reported net income of $31.16 million or $0.30 per share for the fourth quarter, higher than $23.30 million or $0.23 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $33.84 million or $0.33 per share, compared to $33.04 million or $0.32 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 12.5 percent to $1.51 billion from $1.34 billion in the same quarter last year, but missed eleven Wall Street analysts' consensus estimate of $1.52 billion by a whisker.

Region-wise, U.S. sales for the quarter grew 14.5 percent to $1.16 billion, while Canadian sales declined 18.1 percent to $155.0 million from the year-ago quarter.

International sales surged 38.7 percent to $198.4 million, due primarily to sales from acquired businesses of $84.7 million.

Sector-wise, upstream sales increased 18.6 percent to $718.5 million, or 48 percent of total sales, and midstream sales grew 15.5 percent organically to $453.0 million from last year. Meanwhile, downstream sales decreased 1.6 percent to $340.6 million from a year ago.

MRC's gross margin for the quarter contracted 40 basis points to 16.4 percent from last year's 16.8 percent. Meanwhile, selling, general and administrative expenses, as a percentage of total sales, improved 90 basis points to 11.5 percent from last year's 12.4 percent.

Looking ahead, Lane added, "With lower revenue expected in 2015, we will focus on reducing costs and optimizing working capital, which we expect will increase operating cash flow and reduce outstanding debt between $200 and $300 million. Given the macro global energy outlook, we expect 2015 to be a challenging year for our company."

MRC closed Thursday's regular trading session at $13.50, up $0.11 or 0.82% on a volume of 2.46 million shares. However, the stock lost $1.05 or 7.78% in after-hours trading.