Very nice earnings from General Cable (BGC), but
a potential miss in future guidance - yet the stock is up nearly 9%. Just shows, once again, it is not the news but the expectations that matters. Last week we had a fertilizer stock that beat estimates by 70 cents and the market yawned. Today we have a solar company that beat by 20 cents and gets taken up 20%+. And here is a company that might miss future guidance but is up nearly 10%. Many retailers completely miss and get taken up since "it's not so bad as we thought". Ah, the mystery of the market.
General Cable is no longer a fund holding but is an interesting way to play the world infrastructure buildout, and a name I see returning to the fund perhaps later this year when more of a worldwide slowdown (if it happens) is priced into the markets. This is, like many companies, a story that is relying on emerging markets buildout to offset US weakness.
- Wire and cable products maker General Cable Corp. said Tuesday its fourth-quarter profit rose 32 percent as a recent acquisition boosted revenue. General Cable earned $46.6 million, or 84 cents per share, compared with $35.3 million, or 67 cents per share, in the same quarter of 2006. The latest quarter's results included charges related to the write-off of certain telecommunications equipment and an inventory-related charge. Excluding those items, the company posted an adjusted profit of $1 per share.
- Revenue rose 40 percent to $1.3 billion from $925.3 million. Analysts polled by Thomson Financial expected a profit of 87 cents per share on $1.23 billion in revenue.
- General Cable officials attributed the sales increase mainly to General Cable's exposure to global electrical infrastructure markets, a recent acquisition and favorable foreign exchange translation.
- Revenue from acquired businesses contributed $271.5 million in the recent quarter, the company said.
- For the full year, General Cable earned $208.3 million, or $3.82 per share, compared with $135 million, or $2.60 per share, in 2006. Revenue rose to $4.61 billion from $3.67 billion.
- General Cable Corp. on Tuesday predicted first-quarter profit that may miss Wall Street estimates. General Cable projected an adjusted profit of $1.05 or more per share for the period, while analysts polled by Thomson Financial expect a profit of $1.15 per share.
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