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General Cable Reports Third Quarter Results

10/4/2010 Power Cable

General Cable Corporation (NYSE: BGC), one of the most globally diversified industrial companies, reported today results for the third quarter ended October 1, 2010. Diluted earnings per share for the third quarter of 2010 were $0.34. Included in these results was $0.09 per share of non-cash convertible debt interest expense and $0.11 per share of mark to market losses on derivative instruments. Before the impact of these items, adjusted non-GAAP earnings per share for the third quarter of 2010 would have been $0.54.

Highlights

  • Reported revenues and adjusted earnings per share of $1.2 billion and $0.54, respectively, both at the upper-end of the range of management's expectations
  • Volume as measured in metal pounds sold in the third quarter of 2010 increased 7.3% sequentially and 6.7% year over year due to improved demand across many of the Company's businesses; first year over year quarterly improvement in volume in nearly two years
  • Completed the acquisition of BICC Egypt further expanding the Company's geographic footprint and opportunities in emerging markets
  • Established the foundation for an expanding presence in the countries of the Gulf Cooperation Council with the formation of an Oman based joint venture
  • Awarded a significant offshore wind high-voltage project in the Baltic Sea valued at 195 million euros or $270 million at current exchange rates
  • Expanded the Company's Board with the appointment of two new independent directors
  • Sequentially stronger fourth quarter volume as measured in metal pounds sold expected in the range of 5% to 8%; expected revenues of $1.3 to $1.35 billion and adjusted earnings per share of $0.40 to $0.50

Third Quarter Results

Net sales for the third quarter of 2010 were $1,200.5 million, an increase of $13.7 million, or 1.2%, compared to the third quarter of 2009 on a metal-adjusted basis. Before the impact of unfavorable foreign currency exchange rate changes of $47.3 million, net sales for the third quarter increased 5.1% compared to the third quarter of 2009. Volume based on metal pounds sold increased 6.7% in the third quarter of 2010 compared to 2009, and was up 7.3% compared to the second quarter of 2010.

Operating income in the third quarter of 2010 decreased $17.7 million to $42.1 million compared to $59.8 million in the second quarter of 2010. The sequentially lower operating income was principally due to the impact of a planned seasonal reduction of inventory and the traditional summer holiday period in Europe. While the third quarter of 2010 was marked by improved volume as measured in metal pounds sold relative to the second quarter of 2010 and the third quarter of 2009, value added pricing remained weak as the Company continued to experience historically low levels of demand in many of its end markets and low capacity utilization rates which in certain markets was exacerbated by volatile copper prices and a $0.78 per pound increase within the quarter.

Gregory B. Kenny, President and Chief Executive Officer of General Cable, said, "Volume as measured by metal pounds sold exceeded our expectations in the third quarter of 2010 primarily due to demand in the emerging markets led by stronger spending on low-voltage distribution cable for programs such as "Lights for All" in Brazil, reconstruction efforts in Chile and somewhat improved domestic and South East Asian markets served by our facility in Thailand. Also, in North America, demand for overhead aluminum transmission products was better than expected in the third quarter of 2010 as a number of projects were released. We are encouraged by the stronger demand in these businesses in the third quarter of 2010. However, we remain cautious as economic data continues to be mixed, demand remains near historically low levels in many of our end-markets, value added pricing continues to be challenged and the sustainability of certain demand patterns beyond year end remain uncertain, particularly in developed markets."