As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the infrastructure distributors industry, including MRC Global (NYSE: MRC) and its peers.
Focusing on narrow product categories that can lead to economies of scale, infrastructure distributors sell essential goods that often enjoy more predictable revenue streams. For example, the ongoing inspection, maintenance, and replacement of pipes and water pumps are critical to a functioning society, rendering them non-discretionary. Lately, innovation to address trends like water conservation has driven incremental sales. But like the broader industrials sector, infrastructure distributors are also at the whim of economic cycles as external factors like interest rates can greatly impact commercial and residential construction projects that drive demand for infrastructure products.
The 4 infrastructure distributors stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 1%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8% since the latest earnings results.
MRC Global (NYSE: MRC)
Producing bomb casings and tracks for vehicles during WWII, MRC (NYSE: MRC) offers pipes, valves, and fitting products for various industries.
MRC Global reported revenues of $798 million, flat year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and EPS in line with analysts’ estimates.
Rob Saltiel, MRC Global’s President and CEO, stated, “We delivered a strong second quarter, with revenue rising 12% from the first quarter of 2025, at the top of our previous guidance range. All sectors contributed to the sequential revenue increase, led by PTI with 26% sales growth due to robust project activity across both the U.S. and international markets. Our Gas Utilities business continued its rebound with 10% sequential revenue growth, fueled by increased construction projects. Adjusted EBITDA surged 50% sequentially, with margins expanding 170 basis points, reflecting strong operating leverage. We also returned $15 million to shareholders through strategic share repurchases at an average price of $12.35 per share.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $14.52.
Is now the time to buy MRC Global? Access our full analysis of the earnings results here, it’s free.
Best Q2: DistributionNOW (NYSE: DNOW)
Spun off from National Oilwell Varco, DistributionNOW (NYSE: DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.
DistributionNOW reported revenues of $628 million, flat year on year, outperforming analysts’ expectations by 2.6%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
DistributionNOW pulled off the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 1.2% since reporting. It currently trades at $15.40.
Is now the time to buy DistributionNOW? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Watsco (NYSE: WSO)
Originally a manufacturing company, Watsco (NYSE: WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies.
Watsco reported revenues of $2.06 billion, down 3.6% year on year, falling short of analysts’ expectations by 7.2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Watsco delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 13% since the results and currently trades at $404.03.
Read our full analysis of Watsco’s results here.
Core & Main (NYSE: CNM)
Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.
Core & Main reported revenues of $2.09 billion, up 6.6% year on year. This number lagged analysts' expectations by 1%. Overall, it was a disappointing quarter as it also logged full-year EBITDA guidance missing analysts’ expectations.
Core & Main delivered the fastest revenue growth among its peers. The stock is down 20.9% since reporting and currently trades at $52.60.
Read our full, actionable report on Core & Main here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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