CHICAGO General Cable Corp. swung to a first-quarter loss as lower spot prices for copper and aluminum as well as weakness in European and Latin American markets hurt results.
The second quarter is expected to face a significant copper headwind as well, with results forecast to be hampered by selling high-cost inventory into a lower metal price environment, the Highland Heights, Ky.-based diversified industrial firm said in commentary released with earnings data April 30.
But General Cable remains optimistic about its longer-term growth prospects, ticking off future sources of demand, such as the 2014 World Cup and 2016 Summer Olympics in Brazil.
While the current operating environment remains challenging ... intermediate and long-term demand growth drivers in the companys key end markets in North America and (the rest of the world) remain intact, General Cable president and chief executive officer Gregory B. Kenny said in the commentary.
General Cable reported a net loss of $46.5 million in the three months ended March 29 compared with net income of $22.7 million in the year-ago quarter despite sales increasing 7 percent to $1.53 billion in the same comparison. The company sold 311.1 million pounds of metal in the first quarter of 2013, up 19.8 percent from the 259.6 million pounds sold in the year-ago quarter.
While results in North America were generally solid, European markets were weaker, and Latin American results were hurt by political and economic uncertainty in Venezuela as well as typical seasonal slowdowns in the region, General Cable said.
In North America, General Cable recorded revenue of $705 million in the first quarter, up 30.3 percent from $541.2 million in the same quarter a year ago as metals sales volumes surged 80.4 percent year over year to 152.6 million pounds. In Europe and the Mediterranean, revenue was $373.5 million in the first quarter, down 10 percent from first-quarter 2012, as metal sales slipped 4.7 percent to 69.7 million pounds. In the rest of the world, the company saw revenues slide 4.5 percent to $454.6 million, while metals sales volumes fell 12.9 percent to 88.8 million pounds in the same comparison.
Adjusted operating results and metal pounds sold were generally in line with expectations in all three of our reportable segments for the first quarter of 2013 despite the declining metal price environment experienced toward the end of the quarter, Kenny said in a statement.
In North America, sales volumes for industrial, networking and specialty cablesin particular, those used in natural resources extractionwere stable year over year, General Cable said. While the companys utility business in the region benefited from an improving construction sector, results did not compare well to first-quarter 2012, when sales were bolstered by mild winter weather and wind-farm projects, the company said.