MRC Global posts 18 percent sales decline
First quarter sales for MRC Global were $794 million, an 18 percent decline from $970 million in the first quarter of 2019.
Net income for the quarter was $3 million, or 4 cents per diluted share, compared to $12 million, or 14 cents, in last year's first quarter.
U.S. sales were $638 million, down 18 percent from the same quarter in 2019. Upstream production sales decreased by $67 million, or 33 percent, primarily due to increased capital discipline from customers. Downstream and industrial sales declined $46 million, or 19 percent, primarily due to non-recurring project work. Midstream pipeline sales declined $23 million, or 17 percent, due to reduced customer spending and timing of customer projects.
Canadian sales were $50 million, down 26 percent from $18 million for the same quarter in 2019, driven primarily by the upstream production sector, which was adversely affected by government imposed production limits as well as the gas utilities sector, which was lower due to a non-recurring pipe delivery.
International sales were $106 million, down $17 million, or 14 percent, from the same period in 2019, driven primarily by the conclusion of an upstream production project in Kazakhstan.
"Customer spending has slowed considerably in April in response to the unfavorable commodity price environment and a significant decline in oil and gas global demand brought about by the COVID-19 pandemic. As a result, we are taking steps to further reduce our operating costs by $80 million and reduce inventory by $140 million or more compared to 2019,” said Andrew R. Lane, president and chief executive officer.
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