General Cable sees expectations met

Adjusted operating income was above management's expectations for 2Q as pricing held up better than anticipated in a declining metal cost environment, states General Cable.

Furthermore, the company's Europe and Mediterranean businesses performed relatively stronger.

Excluding certain items, adjusted earnings per share of $0.69 and adjusted operating income of $84.5 million were stronger than anticipated. For the second quarter, reported operating income was $71.8 million and reported earnings per share were $0.24.

Second Quarter Results

Sequentially, net sales in the second quarter of 2013 increased $180.9 million to $1,645.9 million, or 12% on a metal-adjusted basis as compared to the first quarter of 2013. This increase is principally due to seasonal demand and a greater mix of copper-based product shipments. Sequentially, adjusted operating income for the second quarter of 2013 was up $38.3 million, or 83% compared to $46.2 million in the first quarter of 2013.

Helping to mitigate the impact of selling higher average cost inventory into a lower metal price environment in the second quarter were improved adjusted operating results in Venezuela and Europe as well as the benefit of seasonal demand patterns in the Americas. Asia Pacific remains a source of ongoing strength principally due to construction and electrical infrastructure investments in Thailand and the Philippines.

Gregory B. Kenny, President and Chief Executive Officer of General Cable, said, "Adjusted operating results exceeded our expectations for the second quarter of 2013 despite persistent metal cost headwinds due to selling higher average cost inventory into a lower metal price environment. Excluding acquisitions and aerial transmission projects in North America and Brazil, global unit volume improved sequentially 7% as seasonal demand and construction activity as well as reliability and reinforcement work by electric utilities increased as compared to the first quarter of 2013. Despite a sharp improvement in seasonal demand, unit volume was below expectations in some businesses in North America and ROW as were metal intensive aerial transmission product shipments in North America. In Europe and Mediterranean, demand improved sequentially 8% in the second quarter of 2013, which was consistent with our expectations. Overall, seasonally adjusted demand remains relatively flat in most of our major markets but we are encouraged by the continued strong financial performance of our recent acquisitions in the U.S., Canada and China. We are also encouraged by the progress in our submarine power turnkey project business in Europe as well as Spain, both of which performed better than expected in the second quarter."

Full Year 2013 and Third Quarter 2013 Outlook

Copper and aluminum spot prices as of July 30, 2013 have declined approximately 6% and 9%, respectively, from the company's previous forward-looking metal price assumptions of $3.23 and $1.00, respectively. As a result of the current demand environment and the ongoing near-term metal cost headwind, the company now expects adjusted operating income to be in the range of $270 to $290 million for 2013 on 1.3 to 1.35 billion metal pounds sold. At the midpoint, adjusted operating income and global unit volume over the second half of 2013 are expected to improve approximately 14% and 8%, respectively, as compared to the first half of 2013.

The company's third quarter revenues are expected to be in the range of $1.6 to $1.65 billion on low to mid-single digit volume improvement sequentially. The Company expects adjusted operating income to be in the range of $70 to $80 million. Adjusted earnings per share are expected to be in the range of $0.50 to $0.60 per share before the impact of non-cash convertible debt interest expense and mark to market gains or losses on derivative instruments.

The Company's outlook assumes copper and aluminum spot prices of $3.04 and $0.91 as of July 30, 2013. The benefit of slightly stronger sequential demand is expected to be burdened by the impact of selling higher average cost inventory into a lower metal price environment and planned seasonal inventory quantity reductions globally as well as lower operating profit in Venezuela following the strong spending experienced in the second quarter of 2013.


2013/08/10 08:26:27 Source：(Evertiq)

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