General Cable Corporation has downgraded its predictions for its adjusted operating income for the fourth quarter.
The Fortune 500 company, which develops and manufactures copper, aluminum and fibre optic wire and cable, now expects adjusted operating income for the fourth quarter in the range of $45 to $47 million rather than the previously stated range of $55 to $65 million.
The firm said the adjustment was largely due to the need to absorb $12 million of expenses after revising the estimated profitability of certain submarine turnkey projects and the Company expects reported operating income in the range of $2 to $4 million for the fourth quarter.
Among those things expected to negatively affect the reported fourth quarter results was an equipment failure at the company’s submarine power cable manufacturing facility in Germany, as well as submarine turnkey project delays and deferrals which are expected to result in one-time charges in the range of $16 million.
Other incidents resulting in year-end adjustments in their rest of the world business (ROW) include financial restatement and forensic investigation costs, one-off restructuring-related tax charges and acquisition costs and severance-related charges in Spain, which are collectively expected to result in charges in the range of $37 million.
Gregory B. Kenny, president and CEO, said: “Despite the impact of these items in the fourth quarter of 2012, we believe demand growth drivers in important markets in North America and the rest of the world are fundamentally unchanged.”
The firm believes the acquisitions of Alcan Cable North America, Prestolite and Procables (Colombia) are expected to contribute meaningfully to the fourth quarter results and they believe their North America and ROW businesses finished the year with an overall positive operating performance in the fourth quarter.
Mr Kenny said: “We are also encouraged by the performance of recent acquisitions including Alcan Cable, Prestolite and Procables as well as the potential of our long-term growth investments in Brazil, India, Mexico, Peru, and South Africa.
“For 2013, the Company is expecting to generate operating income in the range of $300 to $340 million as we focus on the integration of recent acquisitions and continuous improvement at our manufacturing facilities around the world.
“Unit volume for 2013 is expected to be in the range of 1.4 to 1.5 billion metal pounds, including approximately 350 to 400 million metal pounds from acquisitions completed in 2012. For 2013, we expect our recent acquisitions along with our base business in the Americas, Africa, and Asia Pacific to continue to show improvement.
“Our Europe and Mediterranean segment is expected to contribute in the range of 3 to 6 per cent of overall operating income in 2013 driven by our businesses throughout the region as our Iberian and submarine turnkey project businesses are expected to operate around breakeven.
“While the Spanish end market is expected to remain difficult in 2013, our actions taken in Spain over the last four years to reduce our on-going cost base and deliver growth in our exports from Spain should help offset continuing weakness in the domestic market.”