Latest news with #DistributionNOW
Yahoo
5 days ago
- Business
- Yahoo
DNOW Q1 Earnings Call: Margin Resilience and Market Diversification Amid Tariff Uncertainty
Energy and industrial distributor DistributionNOW (NYSE:DNOW) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 6.4% year on year to $599 million. Its non-GAAP profit of $0.22 per share was 26.9% above analysts' consensus estimates. Is now the time to buy DNOW? Find out in our full research report (it's free). Revenue: $599 million vs analyst estimates of $587.8 million (6.4% year-on-year growth, 1.9% beat) Adjusted EPS: $0.22 vs analyst estimates of $0.17 (26.9% beat) Adjusted EBITDA: $46 million vs analyst estimates of $40.4 million (7.7% margin, 13.9% beat) Operating Margin: 5%, in line with the same quarter last year Market Capitalization: $1.57 billion DistributionNOW's first quarter results were shaped by steady demand in U.S. midstream infrastructure and continued momentum in the company's Process Solutions segment, despite a largely unchanged U.S. rig count and lower completions activity. Management pointed to resilient gross margins and a diversified market mix as core reasons for outperforming expectations. CEO David Cherechinsky highlighted that the quarter delivered the second-best first quarter EBITDA in company history, noting, 'This is notable given the misunderstood perception that the upstream sector alone drives opportunities for DNOW.' The company's recent acquisition in Singapore further contributed to expansion in the Asia Pacific region and strengthened its MacLean International brand, underscoring the importance of international diversification. Cherechinsky also emphasized the effectiveness of DNOW's supply chain repositioning in response to previous tariff rounds and supply disruptions, which allowed the company to maintain operational flexibility. Looking ahead, DistributionNOW's outlook hinges on its ability to manage tariff-driven cost pressures, capitalize on U.S. midstream opportunities, and further penetrate adjacent industrial markets. Management reaffirmed full-year revenue guidance with expectations of flat to high-single-digit growth, supported by continued investment in digital initiatives and targeted M&A. Cherechinsky acknowledged ongoing macro uncertainty, driven by evolving tariffs and fluctuating oil prices, stating, 'The dynamics of this environment remain volatile, leading to fluctuations in market sentiment.' The company's strategy includes passing on supplier cost increases, optimizing pricing structures, and leveraging its purchasing power to buffer against inflation and supply chain volatility. While risks remain from potential declines in U.S. rig activity, DNOW anticipates that midstream demand and its inventory planning will help offset upstream headwinds and support earnings stability. Management attributed first quarter performance to execution in U.S. midstream and Process Solutions, strategic inventory planning, and swift adaptation to tariff and supply chain changes. Midstream and Process Solutions momentum: Increased activity in U.S. midstream infrastructure and a full-quarter contribution from the Trojan acquisition boosted growth, with Process Solutions delivering its highest-ever quarterly revenue contribution. Strategic inventory build: The company intentionally increased inventory in anticipation of tariff-related supply disruptions, positioning itself to maintain product availability and optimize procurement costs as tariff impacts unfold. International expansion with acquisition: The acquisition of a Singapore-based distributor expanded DistributionNOW's MacLean International offering in Asia Pacific, targeting diversified end markets such as marine, petrochemical, and data centers. Digital transformation progress: DigitalNOW initiatives drove efficiencies, with digital revenue reaching a record 53% of SAP-related sales. Management highlighted the rollout of AI-powered process automation, including certificate indexing and system integration. Tariff and inflation management: The company's supply chain adjustments reduced dependence on China, with most products sourced domestically or from alternative international suppliers. Management expects to pass on cost increases and adjust pricing to protect margins as new tariffs take effect. DistributionNOW's forward guidance is shaped by tariff-driven pricing, midstream growth, and ongoing diversification into adjacent markets. Tariffs and pricing strategy: Management expects recently announced tariffs and supplier cost inflation to drive higher input costs, but plans to pass these through to customers via pricing adjustments. The company anticipates that its inventory position and sourcing flexibility will help maintain gross margin levels. U.S. midstream and Process Solutions growth: Demand in U.S. midstream, including infrastructure expansions and gathering asset investments, is projected to remain strong. Process Solutions, strengthened by recent acquisitions, is expected to capture additional revenue from industrial and energy transition markets, such as water, wastewater, and data centers. M&A and market adjacencies: DistributionNOW intends to pursue further acquisitions, particularly in U.S. Process Solutions, and seeks to grow in adjacent sectors like mining, chemicals, and renewable energy. Management noted that diversification efforts are designed to reduce reliance on upstream drilling and completion activity, mitigating downside risk from potential rig count declines. Looking forward, the StockStory team will monitor (1) how effectively DistributionNOW passes on tariff-related cost increases to customers and preserves gross margins, (2) continued expansion and integration of recent acquisitions in international and Process Solutions markets, and (3) the pace of digital adoption and AI-driven process improvements. Progress in adjacent market penetration and the impact of rig count trends will also be watched closely. DistributionNOW currently trades at a forward EV-to-EBITDA ratio of 10.3×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
7 days ago
- Business
- Yahoo
Earnings To Watch: Core & Main (CNM) Reports Q1 Results Tomorrow
Water and fire protection solutions company Core & Main (NYSE:CNM) will be reporting results tomorrow before the bell. Here's what investors should know. Core & Main beat analysts' revenue expectations by 1.7% last quarter, reporting revenues of $1.70 billion, up 17.9% year on year. It was a slower quarter for the company, with a miss of analysts' EPS estimates and a miss of analysts' adjusted operating income estimates. Is Core & Main a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Core & Main's revenue to grow 6% year on year to $1.85 billion, slowing from the 10.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.54 per share. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Core & Main has missed Wall Street's revenue estimates twice over the last two years. Looking at Core & Main's peers in the industrial distributors segment, some have already reported their Q1 results, giving us a hint as to what we can expect. DistributionNOW delivered year-on-year revenue growth of 6.4%, beating analysts' expectations by 1.9%, and MRC Global reported a revenue decline of 8.4%, in line with consensus estimates. DistributionNOW traded down 9.1% following the results while MRC Global was also down 6.1%. Read our full analysis of DistributionNOW's results here and MRC Global's results here. Investors in the industrial distributors segment have had steady hands going into earnings, with share prices up 1.5% on average over the last month. Core & Main is up 12.8% during the same time and is heading into earnings with an average analyst price target of $60.12 (compared to the current share price of $60.10). Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
28-04-2025
- Business
- Yahoo
3 Reasons to Avoid DNOW and 1 Stock to Buy Instead
Since April 2020, the S&P 500 has delivered a total return of 92.4%. But one standout stock has nearly doubled the market - over the past five years, DistributionNOW has surged 162% to $15.52 per share. Its momentum hasn't stopped as it's also gained 29.5% in the last six months thanks to its solid quarterly results, beating the S&P by 34.9%. Is now the time to buy DistributionNOW, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Despite the momentum, we're swiping left on DistributionNOW for now. Here are three reasons why DNOW doesn't excite us and a stock we'd rather own. Spun off from National Oilwell Varco, DistributionNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. DistributionNOW's demand was weak over the last five years as its sales fell at a 4.3% annual rate. This wasn't a great result and is a sign of poor business quality. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. DistributionNOW was roughly breakeven when averaging the last five years of quarterly operating profits, one of the worst outcomes in the industrials sector. This result isn't too surprising given its low gross margin as a starting point. Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business. Sadly for DistributionNOW, its EPS declined by 1.7% annually over the last two years while its revenue grew by 5.4%. This tells us the company became less profitable on a per-share basis as it expanded. We see the value of companies helping their customers, but in the case of DistributionNOW, we're out. With its shares beating the market recently, the stock trades at 20.4× forward price-to-earnings (or $15.52 per share). This valuation tells us a lot of optimism is priced in - we think there are better investment opportunities out there. We'd suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
11-04-2025
- Business
- Yahoo
Infrastructure Distributors Stocks Q4 In Review: Watsco (NYSE:WSO) Vs Peers
Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let's have a look at Watsco (NYSE:WSO) 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 satisfactory Q4. As a group, revenues were in line with analysts' consensus estimates. While some infrastructure distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results. 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 $1.75 billion, up 9.4% year on year. This print exceeded analysts' expectations by 5.3%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' same-store sales and adjusted operating income estimates. Albert H. Nahmad, Watsco's Chairman and CEO, commented: 'Watsco had a terrific fourth quarter, achieving record sales and earnings, improved operating efficiency, expanded margins and record cash flow. Looking ahead, the transition to A2L products is well underway, providing incremental opportunities for growth and share gains as our technology platforms gain more adoption in the marketplace. Our teams continue to lead and innovate, and I am optimistic that our industry-leading scale, entrepreneurial culture, technology advantage and financial strength position us to continue to capture growth and share.' Watsco scored the biggest analyst estimates beat of the whole group. The stock is up 2.8% since reporting and currently trades at $499. Is now the time to buy Watsco? Access our full analysis of the earnings results here, it's free. 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 $571 million, up 2.9% year on year, outperforming analysts' expectations by 3.4%. The business had an incredible quarter with an impressive beat of analysts' EPS estimates and a solid beat of analysts' EBITDA estimates. The market seems content with the results as the stock is up 4.9% since reporting. It currently trades at $14.83. Is now the time to buy DistributionNOW? Access our full analysis of the earnings results here, it's free. 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 $664 million, down 13.5% year on year, falling short of analysts' expectations by 8.7%. It was a disappointing quarter as it posted a miss of analysts' Fittings revenue estimates and a significant miss of analysts' adjusted operating income estimates. MRC Global delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 9.5% since the results and currently trades at $10.05. Read our full analysis of MRC Global's results here. 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 $1.70 billion, up 17.9% year on year. This result beat analysts' expectations by 1.7%. Aside from that, it was a slower quarter as it logged a significant miss of analysts' EPS estimates and a miss of analysts' adjusted operating income estimates. Core & Main achieved the fastest revenue growth among its peers. The stock is down 4.2% since reporting and currently trades at $47.51. Read our full, actionable report on Core & Main here, it's free. As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. 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Yahoo
09-04-2025
- Business
- Yahoo
Industrial Distributors Stocks Q4 Teardown: Beacon Roofing Supply (NASDAQ:BECN) Vs The Rest
As the Q4 earnings season comes to a close, it's time to take stock of this quarter's best and worst performers in the industrial distributors industry, including Beacon Roofing Supply (NASDAQ:BECN) and its peers. Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Distributors that boast a reliable selection of products–everything from hardhats and fasteners for jet engines to ceiling systems–and quickly deliver goods to customers can benefit from this theme. While e-commerce hasn't disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to better interact with customers. Additionally, distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand. The 28 industrial distributors stocks we track reported a mixed Q4. As a group, revenues along with next quarter's revenue guidance were in line with analysts' consensus estimates. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 18% since the latest earnings results. Established in 1928, Beacon Roofing Supply (NASDAQ:BECN) distributes residential and commercial roofing materials and complementary building products. Beacon Roofing Supply reported revenues of $2.40 billion, up 4.5% year on year. This print fell short of analysts' expectations by 1.1%. Overall, it was a slower quarter for the company with a significant miss of analysts' adjusted operating income estimates and a miss of analysts' EBITDA estimates. 'Despite the challenging economic environment in 2024, we delivered record fourth quarter and full year sales and our highest fourth quarter Adjusted EBITDA in history,' said Julian Francis, Beacon's President & CEO. The stock is up 5.6% since reporting and currently trades at $122.54. Read our full report on Beacon Roofing Supply here, it's free. 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 $571 million, up 2.9% year on year, outperforming analysts' expectations by 3.4%. The business had an incredible quarter with a solid beat of analysts' EPS estimates and an impressive beat of analysts' EBITDA estimates. The stock is down 2.6% since reporting. It currently trades at $13.77. Is now the time to buy DistributionNOW? Access our full analysis of the earnings results here, it's free. 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 $664 million, down 13.5% year on year, falling short of analysts' expectations by 8.7%. It was a disappointing quarter as it posted a significant miss of analysts' adjusted operating income estimates. As expected, the stock is down 14.5% since the results and currently trades at $9.49. Read our full analysis of MRC Global's results here. Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products. Richardson Electronics reported revenues of $49.49 million, up 12.1% year on year. This number missed analysts' expectations by 3.5%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts' EBITDA and EPS estimates. The stock is down 39% since reporting and currently trades at $8.97. Read our full, actionable report on Richardson Electronics here, it's free. Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions. Global Industrial reported revenues of $302.3 million, down 5.6% year on year. This print came in 1.2% below analysts' expectations. It was a slower quarter as it also logged a miss of analysts' EPS estimates. The stock is down 12.3% since reporting and currently trades at $21.32. Read our full, actionable report on Global Industrial here, it's free. Thanks to the Fed's rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn't send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump's November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
