MRC Global (MRC) Misses Q4 EPS by 41c, Revenues Miss; Offers FY20 EPS Guidance Below Consensus, FY20 Revenue Mid-Point Guidance Below Consensus

MRC Global (NYSE: MRC) reported Q4 EPS of ($0.35), $0.41 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $766 million versus the consensus estimate of $850.02 million.

Andrew R. Lane, MRC Global's president and chief executive officer stated, "Customer spending levels in the fourth quarter were significantly lower than expected as budget exhaustion and capital discipline drove customer behavior. Despite sales being down this quarter, we generated $108 million in cash from operations and $242 million for the year, above our stated goal. Our free cash flow for 2019 was $200 million, resulting in a free cash flow yield of approximately 20%, based on today\'s stock price. We also completed our most recent share buyback program in the fourth quarter. Since we began repurchasing shares in 2015, we have returned $375 million to shareholders and repurchased 24.2 million shares. Our cost and debt reduction efforts have also been successful. Excluding certain items, we reduced our SG&A in 2019 by $25 million and our outstanding debt by $133 million, as compared to last year. SG&A reductions in 2019 were taken by streamlining operations in alignment with lower activity levels, which included closing locations and other cost reduction efforts, all resulting in a reduction in headcount of 360 or 10%, including 130 in the fourth quarter."

"Due to continued weakness in market conditions, we expect 2020 activity levels to be lower than 2019. However, we remain committed to delivering the highest returns for shareholders through cost and debt reduction, operational and working capital efficiencies and a strategy of pursuing higher margin opportunities. Our business model is resilient, and we expect to continue generating strong operating cash flow with a minimum target of $110 million in 2020." Mr. Lane added.

GUIDANCE:

MRC Global sees FY2020 EPS of $0.19-$0.56, versus the consensus of $0.71. MRC Global sees FY2020 revenue of $3.2-3.7 billion, versus the consensus of $3.6 billion.

For earnings history and earnings-related data on MRC Global (MRC) click here.

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