Shares of General Cable Corp. (BGC) surged 8 percent in the after-hours trading on Monday after the power transmission cable maker reported earnings for the first quarter that significantly topped analysts' expectations. The results reflected lower metal cost headwinds and improved volumes. The company also issued earnings and revenue forecast for the second quarter.
"We experienced broad-based improvement in a number of our businesses resulting in each segment reporting better than expected operating results in the first quarter as volumes increased and market metal prices were closer to inventory book values computed under average cost," President and CEO Gregory Kenny said in a statement.
The Highland Heights, Kentucky-based company reported net income of $24.9 million or $0.49 per share for the first quarter, lower than $38.2 million or $0.70 per share in the prior-year quarter.
Excluding items, adjusted earnings for the quarter dropped to $0.48 per share from $0.79 per share in the year-ago quarter. On average, 7 analysts polled by Thomson Reuters expected the company to earn $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 7 percent to $1.43 billion from the same quarter last year, on a metal-adjusted basis, and topped five Wall Street analysts' consensus estimate of $1.40 billion.
The improved metal prices for much of the quarter helping the company to mitigate the burden of selling higher average cost inventory into a lower metal price environment.
Operating income for the quarter increased 69 percent to $53.4 million from the year-ago quarter. On a metal adjusted basis, operating margin of 3.7 percent was down 180 basis points last year.
Volume based on metal pounds sold increased 3 percent during the quarter, primarily reflecting global aerial transmission product shipments.
Looking ahead to the second quarter, General Cable expects adjusted earnings in a range of $0.65 to $0.75 per share, on quarterly revenues between about $1.60 billion and $1.65 billion. Analysts currently expect the company to earn $0.72 per share on a revenue of $1.57 billion in the second quarter.
For the full-year 2012, the company continues to expect volume as measured in metal pounds sold to increase in the range of 3 to 7 percent from last year.
'While the impact of fiscal tightening throughout Europe and sovereign debt concerns remain, overall we are encouraged by the start to 2012 particularly as we head into the seasonally stronger second and third quarters. Our businesses in the Americas, Africa and Asia remain a source of stability, collectively, with growth in key markets," Kenny added.
BGC closed Monday's regular trading session at $29.44, down $0.96 or 3.16% on a volume of 1.18 million shares. However, the stock surged $2.36 or 8.02% in the after-hours trading.
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