NEW YORK Encore Wire
Corp.s net income tumbled in 2012 on lower building wire
prices and fewer sales.
The McKinney, Texas-based wire
producer reported net income of $19.8 million in 2012, down
60.5 percent from $50.1 million a year earlier, on sales that
fell 9.2 percent to $1.07 billion from $1.18 billion.
"Lower prices for building wire
sold in the year accounted for most of the decrease in net
sales, decreasing 10.4 percent per copper pound vs. the same
period in 2011," Encore said.
Fourth-quarter of $5.2 million
plunged nearly 68 percent from $16.3 million in the same
year-ago quarter, despite a 3.9-percent rise in sales to $258
million from $248.3 million.
"The fourth quarter of this year
was another fairly steady volume quarter, considering the time
of the year and the current economic and construction industry
environment," president and chief executive officer Daniel
Jones said in a statement.
"As we have previously noted,
one of the key metrics to our earnings is the
spread between the price of wire sold and cost of
raw copper purchased in any given period. Relatively small
movements in the spread can affect our earnings per share ...
spreads were down 17 percent in the fourth quarter of 2012 vs.
the fourth quarter of 2011, and down 9.4 percent on an annual
basis in 2012."
Encore is optimistic about
demand this year, as most of its electrical distributor
customers have lean inventories.
The companys aluminum wire
building plant in Texas began to produce wire in the fourth
quarter, with aluminum wire accounting for 3.6 percent of net
sales for the year.
Encore plans to expand its
distribution of aluminum wire to all sales representatives and
customers in the first quarter, and expects to see sales of
these products increase gradually over the course of 2013.