MCKINNEY, Texas (AP) — Encore Wire Corp. on Tuesday reported fourth-quarter profit of $25 million.
On a per-share basis, the McKinney, Texas-based company said it had profit of $1.20.
The copper wire maker posted revenue of $319.7 million in the period.
For the year, the company reported profit of $78.2 million, or $3.74 per share. Revenue was reported as $1.29 billion.
Encore Wire shares have increased 12 percent since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $56.25, a rise of 16 percent in the last 12 months.
Commenting on the results, Daniel L. Jones, Chairman, President and Chief Executive Officer, said, “We are pleased to report a great fourth quarter and full year. Our unit sales were up for the year. The $3.74 of EPS in 2018 is a 43% increase over the $2.61 EPS in 2017 (from core operations, net of the federal tax cut), and represents the second-best EPS in the history of the Company. One of the key metrics to our earnings is the spread between the price of copper wire sold and the cost of raw copper purchased in any given period. The copper wire spread increased 9.8% in 2018 versus 2017, as the average price of copper purchased increased 5.7% in 2018 versus 2017, and the average selling price of wire sold increased 7.0%. We are also encouraged by the fact spreads improved during the fourth quarter of 2018 versus the third quarter of 2018. Copper spreads increased 2.8% on this sequential quarterly comparison. We view this positive trend in margins as a sign of the strong construction industry environment across the country. Our conversations with our sales reps, distributor customers and their contractor customers indicate that the outlook for 2019 is also very good.
“We continue to lead and support industry price increases in an effort to maintain and increase margins. We believe our superior order fill rates continue to enhance our competitive position. As orders come in from electrical contractors, the distributors can count on our order fill rates to ensure quick deliveries from coast to coast. We have been able to accomplish this despite holding what are historically lean inventories for us.
“Our balance sheet is very strong. We have no long-term debt, and our revolving line of credit is paid down to zero. In addition, we had $178.4 million in cash at the end of the quarter. We also declared another cash dividend during the quarter. We understand that this is a cyclical industry and therefore we designed and manage our cost structure and balance sheet accordingly. We thank our employees and associates for their outstanding effort and our shareholders for their continued support.”
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