HIGHLAND HEIGHTS, Ky. — General Cable Corporation reported results for the first quarter ended March 31, 2017. For the quarter, reported diluted earnings per share were $0.24 and reported operating income was $24 million. The Company generated adjusted earnings per share for the quarter of $0.27 and adjusted operating income of $45 million.
Michael T. McDonnell, President and Chief Executive Officer, said, “We’re very pleased with our strong first quarter results. First quarter adjusted operating income was above expectations driven in part by the execution of our strategic initiatives in North America and substantial improvement in Latin America. We continue to be encouraged with the progress of North America as we execute our strategic roadmap. We expect to see improvement in Europe through the remainder of 2017 as we are continuing to address delays in a European restructuring project while also driving favorable performance in our land turn-key project business and improved backlog in our subsea project business. Overall, we are moving our businesses forward despite declines in certain key end markets over the recent past, and we maintain a positive outlook on our ability to execute against our roadmap in 2017.”
First Quarter Summary
- Reported operating income of $24 million and adjusted operating income of $45 million were up 16 percent and 7 percent, respectively, compared to the prior year period
- Adjusted operating income of $45 million benefited from strong performance in North America, substantial improvement in our Latin America business, and rising metal prices
- Maintained significant liquidity with $317 million of availability on the Company’s asset based credit facility
- Impact of metal prices was a $7 million benefit compared to a negative $4 million impact in the prior year period
North America – Unit volume was even with the prior year as stronger demand for construction and industrial and specialty (I&S) products was offset by lower demand for rod products. Overall in the first quarter of 2017, demand for our products in construction and I&S markets was up 18% and 6%, respectively, year over year. Demand year over year for electric utility products was stable.
Europe – Unit volume was relatively flat as stronger demand for electric utility products including land-based turnkey projects as well as energy cables helped to offset the easing performance of the Company’s submarine turnkey project business and continued weak demand for industrial and construction projects throughout the region.
Latin America – Unit volume remained relatively flat as increased shipments of aerial transmission cables in Brazil were offset by the continued pressure across the portfolio driven by uneven spending on electric infrastructure and construction projects.
At the end of the first quarter of 2017 and the end of the fourth quarter of 2016, total debt was $1,053 million and $939 million, respectively, and cash and cash equivalent was $83 million and $101 million, respectively. The increase in net debt was principally due to investment in working capital, partly due to rising metal prices, and payments of $33 million related to our FCPA resolution.
Second Quarter 2017 Outlook
Revenues in the second quarter are expected to be in the range of $925 to $975 million. Unit volume is anticipated to be up low-single digits year over year. Reported operating income is anticipated to be in the range of $20 to $35 million and adjusted operating income is anticipated to be in the range of $30 to $45 million for the second quarter. Reported diluted earnings per share are anticipated to be in the range of $0.05 to $0.20 per share and adjusted earnings per share are expected to be in the range of $0.15 to $0.30 per share for the second quarter. The second quarter outlook assumes copper (COMEX) and aluminum (LME) prices of $2.60 and $0.88, respectively. Foreign currency exchange rates are assumed constant in the second quarter outlook. The second quarter outlook for adjusted operating results does not include results from Asia Pacific and Africa.
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