A Look Back at Infrastructure Distributors Stocks’ Q2 Earnings: Core & Main (NYSE:CNM) Vs The Rest Of The Pack

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Core & Main (NYSE:CNM) and the best and worst performers in the infrastructure distributors industry.

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 Q2. As a group, revenues missed analysts’ consensus estimates by 1.7%.

Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data, and infrastructure distributors stocks have had a rough stretch. On average, share prices are down 6.3% since the latest earnings results.

Weakest Q2: 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 $1.96 billion, up 5.5% year on year. This print fell short of analysts’ expectations by 4.5%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.

"We grew net sales by approximately 6% to a new quarterly record of $1.96 billion, reflecting strong growth from acquisitions that was partially offset by project delays from wet weather conditions and comparably lower end-market volumes," said Steve LeClair, chair and CEO of Core & Main.

Core & Main delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $42.72.

Is now the time to buy Core & Main? Access our full analysis of the earnings results here, it’s free.

Best Q2: 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 $832 million, down 4.5% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ operating margin and earnings estimates.

MRC Global achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.5% since reporting. It currently trades at $12.45.

Is now the time to buy MRC Global? Access our full analysis of the earnings results here, it’s free.

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 $2.14 billion, up 6.8% year on year, falling short of analysts’ expectations by 2.1%. It was a disappointing quarter as it posted and a miss of analysts’ earnings estimates.

As expected, the stock is down 2.4% since the results and currently trades at $491.76.

Read our full analysis of Watsco’s results here.

NOW (NYSE:DNOW)

Spun off from National Oilwell Varco, NOW Inc. (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.

NOW reported revenues of $633 million, up 6.6% year on year. This result was in line with analysts’ expectations. It was a strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.

The stock is down 8.8% since reporting and currently trades at $12.81.

Read our full, actionable report on NOW here, it’s free.

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