General Cable (BGC) Sees Q3 adj.-Operating Income at Low-End of Outlook

General Cable (NYSE: BGC) announced third quarter and full year adjusted operating income are expected to be at or around the low end of management’s previously communicated range of $60 million and $200 million, respectively. Adjusted operating cash flow for the full year is expected to trend toward the low end of management’s guidance range of $135 million due principally to the lower cash earnings expected over the second half of the year.

Relative to the Company’s previously communicated outlook for the third quarter, global unit demand has lagged expectations particularly in Latin America, Thailand and Spain. End market demand throughout Latin America continues to be hampered by inconsistent construction spending and electrical infrastructure investment. In Thailand, demand for the Company’s products has not yet been significantly impacted by the actions taken by the new government aimed at improving domestic economic activity. Additionally, the Spanish market remains difficult due to the ongoing challenges faced in that economy. The previously communicated range for adjusted operating income was based on an average COMEX copper price assumption of $3.21 per pound. The August and September (month-to-date) average price of copper has declined to $3.16 and $3.12, respectively. Partially offsetting these trends is the anticipated performance of the Company’s North American business which continues to be a source of relative stability.

Given the demand factors discussed above and, to a lesser extent, the lower copper price environment, the Company anticipates reporting adjusted operating income for 2014 at or around the low end of its previously communicated range of $200 to $230 million. Over the second half of the year, the performance of the Company’s North American business coupled with the initial savings from its restructuring program are expected to partially offset the impact of lower than expected end market demand in Latin America, Thailand and Spain as well as lower copper prices. The current full year outlook now assumes copper (COMEX) and aluminum (LME) prices of $3.09 and $0.88, respectively. The Company’s outlook for the third quarter and full year 2014 excludes the impact of Venezuela. The business in Venezuela is expected to generate $0 to $10 million of pre-tax income for the full year.

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