As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the infrastructure distributors industry, including Core & Main (NYSE:CNM) 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 slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
Luckily, infrastructure distributors stocks have performed well with share prices up 13% on average since the latest earnings results.
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 $2.04 billion, up 11.5% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ organic revenue and adjusted operating income estimates.
“We delivered strong performance in the third quarter, including record quarterly sales and Adjusted EBITDA, demonstrating that Core & Main can grow in any environment,” said Steve LeClair, chair and CEO of Core & Main.
Core & Main achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 20.6% since reporting and currently trades at $58.24.
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 $797 million, down 10.2% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter with an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
