General Cable Below Estimate

General Cable Corporation (BGC - Snapshot Report) reported second-quarter 2011 earnings per share of 68 cents, below the Zacks Consensus Estimate of 83 cents. The earnings per share were above the prior-year earnings per share of 45 cents.

Excluding the impact of $0.09 per share of non-cash convertible debt interest expense, adjusted non-GAAP earnings per share was 77 cents in the quarter.

Total Revenue

Total revenue, on a metal-adjusted basis, in the quarter increased by 11% year over year to $1,532.2 million. Excluding positive effect from foreign currency exchange rate of $80.3 million, sales on metal-adjusted basis increased by 5%.

Volume based on metal pounds sold surged 12% year over year led by demand for aluminum based product shipments for metal intensive, aerial transmission projects in Brazil and North America. On a sequential basis, volume declined during the quarter due to low volume in General Cable’s ROW and Europe and Mediterranean segments.

Sales volume in North America, measured in terms of metal pounds sold, was up 15% year over year, in Europe and in Mediterranean upped 4% and in ROW climbed16%.

Income and Expenses

Operating income in the quarter was $79.8 million, an increase of 33% year over year. Operating profit was up 9% sequentially, led by performance in North America and Operating margin surged 90 basis points year over year to 5.2%.

Balance Sheet

Cash and cash equivalents was $422.0 million at the end of the quarter, with long-term debt of $907.4 million and shareholders equity of $1.73 billion.

Outlook

The company expects GAAP earnings per share to be in the range of 57 cents to 67 cents in the third quarter of 2011 and adjusted non-GAAP earnings per share to be in the range of 66 cents to 76 cents. Total revenue is expected to be in the range of $1.60 billion to $1.65 billion. Volume level is expected to increase by approximately 5% to 8% sequentially, driven by the rising demand in ROW regions. However, the results are expected to be negative affected by summer holiday in Europe. The company remains cautious regarding weak construction sector, higher energy prices, and volatile raw material costs.

Headquartered in Highland Heights, Kentucky, General Cable is engaged in the development, design, manufacture, marketing, and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty, and communications markets. The company offers competitive strengths in areas, such as breadth of product line, brand recognition, distribution and logistics, sales and service, and operating efficiency.

General Cable Corporation holds a Zacks #2 rank (short-term Buy recommendation).

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