General Cable Corporation (BGC) reported first-quarter 2011 earnings per share of 70 cents, beating the Zacks Consensus Estimate of 52 cents. The earnings per share were above the prior-year loss per share of 15 cents.
Excluding the impact of $0.09 per share of non-cash convertible debt interest expense, adjusted non-GAAP earnings per share was 79 cents in the quarter.
Total Revenue
Total revenue, on a metal-adjusted basis, in the quarter increased by 14% year over year to $1,447.6 million. Excluding negative effect from foreign currency exchange rate of $19.0 million, sales on metal-adjusted basis increased by 13%.
Volume based on metal pounds sold surged 22% year over year and declined 2% sequentially. The company witnessed a strong demand in a number of its North American businesses, where price stability was attained and capacity utilization increased. Performance in ROW though improved was uneven. Demand and pricing continued to be the weakest in the European and Mediterranean markets. Production at the €195 million Baltic 2 Wind Farm submarine power cable project started during the quarter. General Cable also witnessed increased order volume of terrestrial high voltage and extra-high voltage, to be produced and delivered by the company worldwide over the next few years.
Sales volume in North America, measured in terms of metal pounds sold, was up 22% year over year, in Europe was up 7% and in ROW was up 36%.
Income and Expenses
Operating income in the quarter was $73.1 million, an increase of 16% year over year, driven by price stability being established on a range of products in North America with the rising demand in ABB’s industrial, specialty and early cycle businesses. Operating margin was up 60 basis points to 5.0%.
Balance Sheet
Cash and cash equivalents was $415.2 million at the end of the quarter, with long-term debt of $913.2 million and shareholders equity of $1.69 billion.
Outlook
The company expects GAAP earnings per share to be in the range of 66 cents to 76 cents in the second quarter of 2011 and adjusted non-GAAP earnings per share to be in the range of 75 cents to 85 cents. Total revenue is expected to be in the range of $1.575 billion to $1.625 billion. Volume level is expected to increase by 8% sequentially, driven by the rising demand in North America and ROW as well as seasonal trends. However, the company remains cautious about very weak construction sector, higher energy prices, stimulus withdrawal and volatile raw material costs.
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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