General Cable Corporation
) reported first-quarter 2013 non-GAAP earnings per share of 23
cents, 11.5% below the Zacks Consensus Estimate of 26 cents.
However, earnings were well within management's range of
expectations. On the same date the Board of Directors also
declared a regular quarterly preferred stock dividend of
approximately $0.72 per share. The dividend is payable on May 24,
2013 to the shareholders of record as on April 30, 2013. The
Company expects the quarterly dividend payment to be less than
On GAAP basis the company reported a net loss of 46.5 million
or 94 cents per share compared to a net income of 22.7 million or
45 cents per share in the year-ago quarter.
Net sales for the quarter were $1.5 billion, reflecting a 10%
rise over last quarter's revenue of $1.4 billion. Total volume
based on metal pounds sold also showed an increase of 20% year
over year, resulting from the recent acquisitions and strong
demand for metal intensive products in North America.
However, net sales of metal pounds declined 5% in the quarter
on an adjusted basis compared to fourth quarter 2012. This was
accompanied by a volume reduction of 4% sequentially. The
quarter-over-quarter decline was due to seasonal demand
Geographical Volume Growth
, volume was down 6% sequentially and 4% year over year.
The year over year sales declined in comparison with the
exceptionally high sales volume a year ago due to a strong demand
in the company's utility cables for construction work. Excluding
this, volume increased 12% year over year. Demand for aerial
transmission products as measured in metal pounds sold increased
8% year over year. This was an all-time quarterly high. Excluding
this, volume increased 3% sequentially, driven by a strong demand
for construction and electrical infrastructure products.
ROW (Rest Of The World)
, volume decreased 22% year over year and 13% sequentially.
Seasonal decline in Latin America fully offset the benefit of the
high demand in Asia Pacific. Order trends in Thailand and the
Philippines were derived from construction activities in the
region. In spite of the adverse effects of political and economic
uncertainty, stronger demands were experienced in Venezuela. The
company also benefited from strong shipment orders in Brazil and
Europe and the Mediterranean
, volume decreased 5% year over year and 2% sequentially. Strong
electric utility products shipment in the Mediterranean partially
offset the adverse effect of demand weakness in major domestic
markets of Europe. On the other hand, the company experienced
increased exports of Spanish facilities. This resulted in
increased sales volume sequentially.
Income and Expenses
Adjusted operating income in the quarter was $46.2 million,
reflecting a $5.7 million or an 11% year over year decline from
the previous year's first quarter income of $51.9 million.
However, it was well within management's expectations.The decline
in operating income is attributable to revised profitability
estimates due to Venezuelan currency devaluation. Strong
contributions from acquisitions partially offset the effects of
seasonal demand weakness in major markets.
Debt and Cash Flow
The company's net debt was $1048.2 million at the end of
the quarter, an increase of $236.3 million from the end of the
fourth quarter of 2012. Working capital requirement increased
during the quarter, as a result of an increase in demand due to
seasonal demand patters. Moreover the Venezuelan currency
devaluation also increased net debt since the value of cash held
in the region was reduced by $45.1 million during the quarter.
However, value of the company's net cash and cash equivalents was
$499.8 million at the end of the quarter, i.e., a decrease of
$138.4 million from that at the end of earlier quarter.
Concurrent with the earnings release, management provided
guidance for the second quarter and full year 2013. The company's
second quarter 2013 revenues are expected to be in the range of
$1.7 to $1.75 billion assuming current metal prices on volume
improvement ranging from 10% to 15% sequentially.
Volume has been revised to be flat to marginally high for the
full year 2013. The adjusted operating income is expected to be
in the range of $70 million to $80 million for second quarter
Adjusted earnings are expected to be in the range of 50 cents
to 60 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. The company expects
comparatively better second quarter results with an improvement
in seasonal trends.
The second quarter outlook reflects a flat seasonal trend in
North America and ROW along with ongoing sharp improvement in
demand for electric utility. Construction and installation work,
particularly in Venezuela is expected to be seasonally better in
the second quarter. The work will gradually improve as the
weather changes in spring and summer.
General Cable currently has a Zacks Rank #5 (Strong Sell).
Other participants in the sector include
Insteel Industries Inc.
China Merchants Holdings (International) Company
) both having a Zacks Rank #1 (Strong Buy) and
), which has a Zacks Rank #2 (Buy).
GENL CABLE CORP (BGC): Free Stock Analysis
CHINA MERCHANTS (CMHHY): Get Free Report
CRANE CO (CR): Free Stock Analysis Report
INSTEEL INDS (IIIN): Free Stock Analysis
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