MRC Global Reports 8% Sales Decline in Q1 2025, Focuses on Core Operations

MRC Global Inc. reported a decline in financial performance for the first quarter of 2025, with total sales of $712 million, down 8% from $777 million in the same period last year. The decrease was primarily attributed to lower revenues in the Downstream, Industrial and Energy Transition (DIET) and Production and Transmission Infrastructure (PTI) sectors, which fell by $47 million and $26 million, respectively. In contrast, the Gas Utilities sector saw a modest increase of $8 million, reflecting a return to more normalized buying patterns among customers. The company's gross profit also decreased to $142 million, representing 19.9% of sales, compared to $159 million or 20.5% of sales in the prior year.

The company's operating income for the quarter was $18 million, a significant drop from $39 million in the first quarter of 2024. This decline was largely driven by reduced sales and margins, particularly in the U.S. segment, where operating income fell to $7 million from $34 million year-over-year. The international segment, however, reported an increase in operating income to $11 million, up from $6 million, indicating some resilience in overseas markets. MRC Global's net income from continuing operations was $8 million, down from $20 million in the previous year, while the company recorded a loss from discontinued operations of $30 million, primarily due to the sale of its Canadian operations.

In terms of strategic developments, MRC Global completed the sale of its Canadian operations to EMCO Corporation on March 14, 2025. This transaction resulted in a pre-tax, non-cash loss on discontinued operations of approximately $22 million recorded in the fourth quarter of 2024. The sale allowed MRC Global to reduce its debt, and the cumulative foreign currency translation adjustment of $28 million was recognized in the condensed consolidated statement of operations for the first quarter of 2025. The company is now focusing on its core operations in the U.S. and international markets, with plans to enhance its product offerings in response to evolving customer needs.

Operationally, MRC Global reported a total employee headcount of over 2,500, serving approximately 8,300 customers through around 200 service locations globally. The company’s backlog, which represents unshipped customer orders, stood at $603 million as of March 31, 2025, an increase from $558 million at the end of the previous quarter. This backlog indicates potential future revenue, although the company cautioned that there is no guarantee that these orders will be realized as revenue.

Looking ahead, MRC Global remains cautiously optimistic about its prospects, particularly in the Gas Utilities sector, which is expected to benefit from ongoing infrastructure upgrades and new residential developments. However, the company also faces challenges, including potential impacts from U.S. government policies and tariffs on imported goods, which could affect pricing and demand for its products. The management emphasized the importance of maintaining strong relationships with suppliers and customers to navigate these uncertainties and capitalize on growth opportunities in the energy transition space.