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General Cable Down to Strong Sell on Soft Market Conditions - Analyst Blog

Zacks Investment Research downgraded wire and cable solutions provider General Cable Corp . ( BGC ) to a Zacks Rank #5 (Strong Sell) on Nov 29.

Why the Downgrade?

General Cable has been witnessing downward estimate revisions after delivering dismal third-quarter 2014 results with both top and bottom lines missing the estimates. The company also lowered the guidance for fiscal 2014. Over the past one year, the company shares have declined about 53%, closing at $13.76 on Nov 28.

On Oct 29, the company reported third-quarter adjusted earnings of 30 cents a share missing the Zacks Consensus Estimate of 39 cents by 23.1%. The company's sales figure of $1,471.7 million also came well below the Zacks Consensus Estimate of $1,517 million. Soft demand in Europe weighed down on the company's financials but strength in North America partially offset the decline.

Along with the earnings release, the company also unveiled its decision to divest its non-core manufacturing businesses in Asia Pacific and Africa. Additionally, the company lowered its adjusted operating income guidance for fiscal 2014 to a range of $175 - $190 million from the previous projection of $200- $230 million.The company is also contemplating a change in management and expansion initiatives to enhance their operations.

Moreover, prevalent volatility in metal prices, uncertain macroeconomic conditions and the ongoing restructuring changes are likely to act as headwinds, going forward.

All these factors triggered a downtrend in the Zacks Consensus Estimate. The downward estimate revisions over the last 30 days caused a 19.4% decline in the Zacks Consensus Estimate for 2014 to 75 cents per share; whereas for 2015, the same slipped 3.3% to $1.45 per share.

Other Stocks to Consider

Some better-ranked stocks in the broader sector include ClearOne, Inc. ( CLRO ), NICE Systems Ltd. ( NICE ) and Gigamon Inc. ( GIMO ), all three carrying a Zacks Rank #2 (Buy).

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GENL CABLE CORP (BGC): Free Stock Analysis Report

NICE SYSTEM-ADR (NICE): Free Stock Analysis Report

CLEARONE INC (CLRO): Free Stock Analysis Report

GIGAMON INC (GIMO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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