General Cable Corporation
) reported fourth-quarter 2012 non-GAAP earnings per share of 28
cents, 3.4% below the Zacks Consensus Estimate of 29 cents.
However, earnings were well above management's range of
Net Sales for the quarter were $1.6 billion, reflecting a 6%
rise over last quarter's revenue of $1.5 billion. Total Volume
also showed an increase of 17% sequentially, resulting from the
recent acquisitions and strong demand in metal intensive products
in North America.
However, excluding the impact of acquisition, sales volume of
metal pounds declined 4% in last quarter as compared to that in
the third quarter. This decline was mainly the result of seasonal
Geographical Volume Growth
, volume was in line with the company's expectations across the
company's business units. Low demand due to the seasonal nature
of the company's business, along with industrial slowdown led to
a decline in demand for wire and cable products during the
reported quarter. However, this was partially offset by steady
demand for electrical infrastructure products (includes
industrial and specialty cables) and robust growth in the metal
intensive Arial transmission products.
, volume was slightly below expectation during the fourth
quarter. Seasonal decline in the Central and South America fully
offset the benefit of the high demand in Asia Pacific. Order
trends in the Central and South America were normal in this
reported quarter compared with strong demand experienced in the
last quarter, especially in Venezuela and Brazil. The top line
was also impacted by the decline in Copper and aluminum rod
Europe and Mediterranean
, volume was in line with management's expectations. Weak
domestic demand in Spain was more than offset by stronger demand
in Electric utility products in France and Mediterranean areas
along with specialty cables and offshore oil & gas
Income and Expenses
Operating income in the quarter was $48.2 million, reflecting
a $27.2 million or 36% sequential fall from previous quarter's
income of $75.4. This decline in operating income is attributable
to revised profitability estimates of certain turnkey submarine
projects, which resulted in an absorption cost of $12 million.
Further, the recessionary condition in Iberia and Europe also led
to the decline.
Concurrent with the earnings release, management provided
guidance for the first quarter and fiscal 2013. The company's
first quarter 2013 revenues are expected to be in the range of
$1.55billionto $1.60 billion assuming average metal prices for
Volume is expected to be flat to marginally low on a
sequential basis. The adjusted operating incomeis expectedto be
in the range of $40millionto $50 million.
Adjusted earnings per share are expected to be in the range of
22 cents to 32 cents per share. The guidance excludes the impact
of non-cash convertible debt interest expense and mark to market
gains or losses on derivative instruments. In addition, the
earnings guidance also excludes the impact of therecent
Venezuelan currency devaluation. The devaluation is expected to
result in a non-recurring charge of $42 million or 82 cents per
The first quarter outlook reflects poor seasonal trend in
North America and ROW along with ongoing recessionary conditions
in Iberia and Europe. Construction and installation work,
particularly in Europe, and the Mediterranean is expected to be
seasonally hampered in the first quarter. The work will gradually
improve as the weather changes in the months of spring and
These declining trends are expected to be partially offset by
strong performance in all the regions of North America. In
addition, the acquisition of Alcan Cable North America is
expected to contribute meaningfully in the coming quarters. The
company expects a better second quarter, resulting from an
improvement in seasonal trends.
BGC currently has a Zacks Rank of #5 (Strong Sell), while its
United Tech Corp
), both have a Zacks Rank of #3 (Hold).
GENL CABLE CORP (BGC): Free Stock Analysis
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UTD TECHS CORP (UTX): Free Stock Analysis
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