General Cable Corporation (BGC) reported fourth-quarter 2012 non-GAAP earnings per share of 28 cents, 3.4% below the Zacks Consensus Estimate of 29 cents. However, earnings were well above management’s range of expectations.
Total Revenue
Net Sales for the quarter were $1.6 billion, reflecting a 6% rise over last quarter’s revenue of $1.5 billion. Total Volume also showed an increase of 17% sequentially, resulting from the recent acquisitions and strong demand in metal intensive products in North America.
However, excluding the impact of acquisition, sales volume of metal pounds declined 4% in last quarter as compared to that in the third quarter. This decline was mainly the result of seasonal demand trends.
Geographical Volume Growth
In North America, volume was in line with the company’s expectations across the company’s business units. Low demand due to the seasonal nature of the company’s business, along with industrial slowdown led to a decline in demand for wire and cable products during the reported quarter. However, this was partially offset by steady demand for electrical infrastructure products (includes industrial and specialty cables) and robust growth in the metal intensive Arial transmission products.
In ROW, volume was slightly below expectation during the fourth quarter. Seasonal decline in the Central and South America fully offset the benefit of the high demand in Asia Pacific. Order trends in the Central and South America were normal in this reported quarter compared with strong demand experienced in the last quarter, especially in Venezuela and Brazil. The top line was also impacted by the decline in Copper and aluminum rod shipments.
In Europe and Mediterranean, volume was in line with management’s expectations. Weak domestic demand in Spain was more than offset by stronger demand in Electric utility products in France and Mediterranean areas along with specialty cables and offshore oil & gas products.
Income and Expenses
Operating income in the quarter was $48.2 million, reflecting a $27.2 million or 36% sequential fall from previous quarter’s income of $75.4. This decline in operating income is attributable to revised profitability estimates of certain turnkey submarine projects, which resulted in an absorption cost of $12 million. Further, the recessionary condition in Iberia and Europe also led to the decline.
Outlook
Concurrent with the earnings release, management provided guidance for the first quarter and fiscal 2013. The company’s first quarter 2013 revenues are expected to be in the range of $1.55billionto $1.60 billion assuming average metal prices for the period.