MRC Global Inc. reported earnings in November. It was another quarter down for the 100-year-old distributor of pipes, valves, and fittings (PVF) and other products and services to the energy industry.
The results for the third quarter ended Sept. 30 are about more of the same. Growth in total sales was modest, but nearly two-thirds of all sales were made through ecommerce.
For the quarter, MRC Global earnings showed sales of $888 million. That’s down 2% from sales of $904 million in the third quarter of 2022. Net income was $35 million, compared with $24 million in the third quarter of the prior year.
MRC Global digital commerce sales
In Q3, MRC Global’s digital commerce accounted for 52.4% of all orders. MRC Global digital sales also accounted for 65% ($484.3 million) of U.S. sales of $745 million.
“Some of our major (gas) customers have significantly reduced spending in the line pipe product group, but we expect these customers to return to previous spending levels as we move through next year,” MRC Global CEO Rob Saltiel told analysts on the earnings call, according to a transcript from SeekingAlpha.com.
For the short-term, energy industry companies have all the pipes, valves and fittings (PVF) and other products they need, he told analysts. But the situation is likely to improve in the next six months.
“It’s very clear that a lot of our major customers really are reducing their inventory levels, having kind of seen the normalization of the supply chains and realized that they were holding too much inventory and too many different piles,” Saltiel told analysts. “We think that this is a shorter-term phenomenon, probably a two-quarter or so phenomenon.”
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