Why MRC Global's Shares Dropped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of industrial supplier MRC Global (NYSE: MRC ) fell as much as 12%, after reporting earnings.

So what: Revenue was flat in the fourth quarter, at $1.3 billion, and net income fell from a $3.6 million profit to a $6.4 million loss, or $0.6 per share. On an adjusted basis, which takes out one-time items, the company said it made a $0.55 profit, which beat expectations by $0.08.

Now what: The fourth quarter wasn't all that bad, but the company said it expects earnings per share of $2.10 next year, and Wall Street set its sights on $2.49. That's a big difference, and that's what investors are looking at today. I'm not seeing enough from guidance or growth to jump in today, but look for improving earnings in coming quarters for a buying signal.

Interested in more info on MRC Global? Add it to your watchlist by clicking here.

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Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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