General Cable Corp. (BGC) filed Quarterly Report for the period ended 2009-10-02.
General Cable Corp. is a leader in the development design manufacture marketing and distribution of copper aluminum and fiber optic wire and cable products for the communications energy and electrical markets. The company sells its products primarily to commercial industrial utility telecommunications original equipment manufacturers military/government retail electrical and communications distributor customers worldwide. General Cable Corp. has a market cap of $1.67 billion; its shares were traded at around $32.1 with a P/E ratio of 11.4 and P/S ratio of 0.3. General Cable Corp. had an annual average earning growth of 3.1% over the past 10 years.
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General Cable’s reported net sales by region and therefore in total are directly influenced by the price of copper and aluminum. The price of copper and aluminum as traded on the COMEX and LME (London Metal Exchange) has historically been subject to considerable volatility. For example, in the three fiscal months ended October 2, 2009 and September 26, 2008, copper cathode on the COMEX averaged $2.67 per pound and $3.45 per pound, respectively, and the daily price of aluminum averaged $0.87 per pound and $1.31 per pound, respectively. In the nine fiscal months ended October 2, 2009 and September 26, 2008, copper cathode on the COMEX averaged $2.13 per pound and $3.59 per pound, respectively, and the daily price of aluminum averaged $0.75 per pound and $1.32 per pound, respectively.
In the third quarter 2008, the Company and its joint venture partner, A. Soriano Corporation (Anscor), announced that the Company acquired and consolidated Phelps Dodge Philippines (PDP) through an increase of its equity investment from 40% to 60%. The Company paid approximately $16.4 million (at prevailing exchange rates) in cash to the sellers in consideration for the additional equity interest in PDP and incurred insignificant fees and expenses related to the transaction. PDP is a joint venture established in 1955 by Anscor, a Philippine public holding company with diverse investments, and Phelps Dodge International Corporation (PDIC), a subsidiary of the Company which was acquired in the fourth quarter of 2007. PDP employs approximately 277 associates and operates one of the largest wire and cable manufacturing facilities in the Philippines. The investment complements the Company’s strategy in the region by providing a platform for further penetration into Southeast Asia markets as well as supporting ongoing operations in Australia, the Middle East and South Africa. In 2007, the last full year before the purchase of additional equity ownership, PDP reported net revenues of approximately $100 million. Net assets and pro forma results of the PDP acquisition are immaterial. The purchase price allocation was finalized in the third quarter of 2009.
The following tables set forth net sales, metal-adjusted net sales and metal pounds sold by segment, in millions. For the metal-adjusted net sales results, net sales for the third quarter of 2008 have been adjusted to reflect the 2009 copper COMEX average price of $2.67 per pound (a $0.78 decrease compared to the same period in 2008) and the aluminum rod average price of $0.87 per pound (a $0.44 decrease compared to the same period in 2008). Metal-adjusted net sales, a non-GAAP financial measure, are provided herein in order to eliminate an estimate of metal price volatility from the comparison of revenues from one period to another. See previous discussion of metal price volatility in the “Overview” section.
BGC is in the portfolios of David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management, David Einhorn of Greenlight Capital Inc, NWQ Managers of NWQ Investment Management Co.
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