CHICAGO General Cable Corp. is hoping for a rebound in the second quarter after a weak start to 2013 following a net loss at the end of 2012.
"Ongoing recessionary conditions" in Europe hurt the companys fourth-quarter results, and the region is expected to continue to drag on its performance in the first quarter, the copper, aluminum, and fiber-optic wire and cable products company said in an outlook accompanying earnings data released Feb. 25.
The Highland Heights, Ky.-based company also expects its results to be hurt by a $42-million charge related to the devaluation of Venezuelas currency.
General Cable posted a net loss of $17.3 million during the quarter on sales of $1.6 billion. Year-ago results werent immediately available, as they were being revisited due to inventory theft at its Brazilian operations. The theft, which might be covered in part by insurance, was previously thought to be related to accounting errors, the company said. Restated financial results are expected to be available later this week.
While first-quarter activity might be slow, General Cable expects a "sharp improvement" in the second quarter as construction activity ramps up, benefitting businesses such as Alcan Cable North America. Other recent acquisitions should further bolster results in the second half of the year, the company said.
General Cable last year completed its $151-million cash acquisition of Alcan Cables North American operations from London-based Rio Tinto Plc (amm.com, Sept. 5) and a related purchase of Alcan Cable China for $34 million (amm.com, Dec. 4).
The company also had completed its acquisition of Prestolite Wire LLC on Nov. 2, it said.
In North America, the residential and nonresidential construction sectors drive demand for roughly 45 percent of General Cables products, including those manufactured by Alcan Cable North America, General Cable said.
"While the operating environment remains challenging in some markets and product lines, we are encouraged by the demand growth drivers," General Cable president and chief executive officer Gregory B. Kenny said in a statement.
General Cable should benefit from growth in the energy and infrastructure sectors, as well as increased construction activity. The company expects strength in housing-related utility and construction products in the United States, and in construction and electrical infrastructure spending in Asia, it said. Spending in Brazil ahead of the 2014 World Cup and the 2016 Olympics, as well as government-sponsored programs, should also boost demand in South America in 2013, the company said.
In a separate development, General Cable said it had made Gregory J. Lampert responsible for all company operations in the Americas. Lampert has served as executive vice president, president and chief executive officer of General Cable North America since 2008. The company also promoted Peter A. Campbell to executive vice president and chief executive officer of the Asia-Pacific region, it said. Campbell joined General Cable more than two years ago as senior vice president of Asia.