HIGHLAND HEIGHTS, Ky. - Wednesday, May 4th 2011 [ME NewsWire]
(BUSINESS WIRE)-- General Cable Corporation(NYSE: BGC), one of the most globally diversified industrial companies, reported today results for the first quarter ended April 1, 2011. Diluted earnings per share for the first quarter of 2011 were $0.70. Included in these results was $0.09 per share of non-cash convertible debt interest expense. Before the impact of this item, adjusted non-GAAP earnings per share for the first quarter of 2011 would have been $0.79.
Highlights
* Reported revenues of $1,447.6 million within the range of management’s forward view
* Adjusted earnings per share of $0.79 above the range of management’s expectation
* Operating income in the first quarter of 2011 increased 16% or $9.9 million to $73.1 million compared to $63.2 million in the fourth quarter of 2010, and was up 28% compared to the first quarter of 2010
* Excluding metal intensive, aerial energy transmission products in North America which are coming off of a record high fourth quarter in terms of pounds shipped, global volume as measured in metal pounds sold in the first quarter of 2011 improved 2% sequentially and 20% year over year
* Volume as measured in metal pounds sold in North America, excluding transmission products, increased 10% sequentially and 16% year over year driven by demand for the Company’s industrial, specialty and early cycle products
* Pricing in North America firmed during the quarter in many markets offsetting rapid inflation in raw material and transportation costs
First Quarter Results
Net sales for the first quarter of 2011 were $1,447.6 million, an increase of $180.2 million, or 14%, compared to the first quarter of 2010 on a metal-adjusted basis. Before the impact of favorable foreign currency exchange rate changes of $19.0 million, net sales for the first quarter increased 13% compared to the first quarter of 2010. Volume based on metal pounds sold increased 22% in the first quarter of 2011 compared to 2010, and was down 2% compared to the fourth quarter of 2010.
Operating income in the first quarter of 2011 increased 16% or $9.9 million to $73.1 million compared to $63.2 million in the fourth quarter of 2010. The increase in operating income was principally due to firming price on a range of products in North America as a result of growing demand in the Company’s industrial, specialty and early cycle businesses. Operating income in ROW sequentially improved in the Central American, Andean, Southeast Asian and African regions. In addition, overall results for the quarter benefited from the absorption of overhead costs during the first quarter as inventory quantities increased in anticipation of seasonal demand patterns. Partially offsetting these benefits sequentially were lower operating results in the Europe & Mediterranean region and higher selling, general and administrative expenses as wage freezes were ended and investments were made in global selling and engineering resources as well as product technology. On a metal adjusted basis, operating margin was 5.0% in the first quarter of 2011, an increase of approximately 60 basis points from the operating margin of 4.4% in the fourth quarter of 2010.
Gregory B. Kenny, President and Chief Executive Officer of General Cable, said, “In the first quarter, many of our North American businesses experienced strong demand and significantly better results as price firmed in a number of sectors while capacity utilization climbed. In our ROW region, business conditions were uneven but generally improving. In addition, we strengthened our market position and product range in Mexico, Colombia, Peru, Australia and South Africa. The European and Mediterranean markets remain the weakest in terms of demand and pricing. However, we are benefiting from our new pan-European organizational design thatnicely leverages the talents of our associates and allows our Spanish operations to benefit from other market opportunities in the region. During the quarter, we started meaningful production on the €195 million Baltic 2 Wind Farm submarine power cable project, which is expected to be manufactured in 2011 and 2012. We are also encouraged by the volume of terrestrial high voltage and extra-high voltage orders which we have taken for production and delivery around the world over the next few years.”
In North America, volume as measured in metal pounds sold increased 22% in the first quarter of 2011 compared to the first quarter of 2010 and was down 3% sequentially when compared to the fourth quarter of 2010. Excluding transmission products, the Company experienced strong demand in most of its other businesses as volume improved 16% in the first quarter of 2011 compared to the first quarter of 2010 and was up 10% sequentially when compared to the fourth quarter of 2010, primarily as a result of demand for the Company’s electrical infrastructure products used in industrial and specialty applications including mining and oil and gas as well as its early cycle products, specifically maintenance, repair and overhaul (MRO), original equipment manufacturers (OEM) and networking applications.
In ROW, volume as measured in metal pounds sold increased 36% in the first quarter of 2011 compared to the first quarter of 2010 and was up 1% sequentially as compared to the fourth quarter of 2010. Volume was a bit lower than expected across a number of business units throughout ROW as economic recoveries in the numerous locations are uneven as are project releases.
In Europe, volume as measured in metal pounds sold increased 7% in the first quarter of 2011 compared to the first quarter of 2010 and was down 4% sequentially when compared to the fourth quarter of 2010. The sequential decline in volume was primarily due to weaker demand for low- and medium-voltage products in France and Algeria.
Other income of $7.0 million in the first quarter of 2011 was primarily attributable to unrealized gains on the mark to market adjustment of various foreign currency and commodity financial instruments.
Liquidity
Net debt was $679.8 million at the end of the first quarter of 2011, an increase of $153.0 million from the end of the fourth quarter of 2010. The increase in net debt is principally the result of higher working capital requirements due to normal seasonal trends as well as the impact of rising raw material cost inputs. The Company continues to maintain adequate liquidity to fund operations, which could include increased working capital requirements as a result of higher raw material cost inputs, internal growth and continuing product and geographic expansion opportunities.
Preferred Stock Dividend
In accordance with the terms of the Company’s 5.75% Series A Convertible Redeemable Preferred Stock, the Board of Directors has declared a regular quarterly preferred stock dividend of approximately $0.72 per share. The dividend is payable on May 24, 2011 to preferred stockholders of record as of the close of business on April 29, 2011. The Company expects the quarterly dividend payment to be less than $0.1 million.
To view the full report including tables please click here.
Contacts
General Cable Corporation
Len Texter, 859-572-8684
Manager, Investor Relations
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