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Taxes & FX Dents BGC's Profits Again - Analyst Blog

Posted: 2/9/2012 8:15:00 AM
Referenced Stocks: BGC

General Cable Corporation ( BGC ) reported fourth-quarter 2011 earnings per share of 9 cents, below the Zacks Consensus Estimate of 37 cents. The earnings per share were below the prior-year earnings per share of 66 cents.

Excluding the impact of 10 cents per share of non-cash convertible debt interest expense and 11 cents per share of mark-to-market losses on financial derivatives, adjusted non-GAAP earnings per share came in at 30 cents in the quarter.

For 2011, earnings per share were $1.61 compared with $1.33 in 2010. The Zacks Consensus Estimate for the year was $2.26.

Total Revenue

Total revenue, on a metal-adjusted basis, in the quarter increased by 8% year over year to $1,369.1 million.

Volume based on metal pounds sold declined 5% year over year driven by weaker demand experienced throughout Europe in non-project based businesses. On a sequential basis, volume inched down 4% during the quarter due to weak Iberian market and the impact of severe flooding in Thailand, partially offset by strong shipment of aerial transmission product in North America and European projects in submarine power and terrestrial high voltage and extra-high voltage businesses.

Sales volume in North America, measured in terms of metal pounds sold, was down 6% year over year, in Europe and Mediterranean decreased 22% and in ROW climbed 10%.

Income and Expenses

Operating income in the quarter was $31.7 million compared with $63.2 million in the prior-year period. Selling, general and administrative expenses were $95.9 million compared with $83.2 million.

Balance Sheet

Cash and cash equivalents were $434.1 million at the end of the year, with long-term debt of $892.6 million and shareholders equity of $1.51 billion.


The company expects revenue in first-quarter 2012 to be in the range of $1.35 billion to $1.45 billion and operating income to be in the range of $35 million to $45 million. Total revenue is expected to be in the range of $1.40 billion to $1.45 billion. Volume in the quarter is expected to be flat sequentially. General Cable's guidance reflects major volatility seen in metal prices, principally copper as well as uncertainties in European market.

In 2012, demand for the full year is an increase of metal pounds sold in the range of 3%-7% year over year.

Headquartered in Highland Heights, Kentucky, General Cable is engaged in the development, design, manufacture, marketing, and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty, and communications markets. The company offers competitive strengths in areas, such as breadth of product line, brand recognition, distribution and logistics, sales and service, and operating efficiency.

General Cable Corporation holds a Zacks #3 rank (short-term Hold recommendation).

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