CHICAGO Low copper prices
could impact General Cable Corp. as far out as the third
quarter of 2013, company executives said.
"It is possible we could see a
little bit of a headwind into the third quarter," president and
chief executive officer Gregory B. Kenny said during a
question-and-answer session with analysts May 1. "Copper has
broken a dime in the last day and a half. Well have to
see where she goes."
Kenny noted that copper prices
have been volatile in recent trading.
"Its been coming down
pretty hard, and we have seen aluminum tracking down as well,"
July Comex copper futures, the
most actively traded contract, settled at $3.1045 per pound May
2, off sharply from the $3.7915-per-pound high recorded thus
far this year on Feb. 1.
Big declines in prices can also
lead to unusual buying patterns, Kenny said. "Some people wait
out for the copper (price) to fall ... and then they will buy
when it starts to look like its firming," he said. "So
(there are) a lot of aberrations when these kind of movements
But chief financial officer,
executive vice president and treasurer Brian R. Robinson
cautioned against reading too much into what he characterized
as "short-term volatility" and "noise" for the Highland
Heights, Ky.-based diversified manufacturer when set against a
Copper prices fell sharply
earlier in April only to rebound within a matter of days,
Robinson said. "Its too early to call," he said of the
possible impact on third-quarter results.
Robinson compared the current
market dynamics with those in the third quarter of 2011, which
also saw a drop in metals pricing. General Cable thought at the
time that the impact could spill over into the first quarter of
2012, but it instead saw the hit "isolated" to the fourth
quarter of 2011, with a recovery in volumes and prices
preventing first-quarter 2012 results from being affected.
Still, he conceded that recent
tumbles in copper prices, while not as "dramatic" as those seen
in 2011, were "quite sizeable."
The company estimates that
operating results could take a $15-million to $20-million hit,
mostly in the second quarter, because of a decline in metals
While lower metals prices mean
that the usual seasonal uptick the company sees could be muted,
Kenny expects to see a "sharp improvement" later in the year,