HIGHLAND HEIGHTS, Ky., Mar 18, 2010 (BUSINESS WIRE) -- General Cable Corporation (NYSE: BGC), today announced a change in
accounting for inventories from the last-in, first-out (LIFO) method to
the average cost method. The Company believes the change is preferable
because the average cost method provides better matching of sales and
expenses, particularly during periods of metal and petrochemical price
volatility, and enhances comparability with industry peers.
The change to average cost is effective with the first quarter of 2010.
Due to this change in accounting, the Company expects to record an
increase in its Shareholders' Equity of approximately $110 to $130
million due primarily to the recognition of the higher average cost
value of inventory compared to the historical LIFO-based inventory
value. In addition, the Company expects its reported earnings per share
for the first quarter of 2010 to increase as a result of the lower
average cost of raw materials, primarily metals, under the average cost
accounting method as compared to the value that would be used for the
first quarter under the Company's historical LIFO accounting method. As
a result of the expected increase in earnings for the first quarter
resulting from the application of the new inventory accounting method,
the Company now expects to report earnings before items in the range of
$0.30 to $0.40 per share compared to our previously issued guidance of
$0.05 to $0.15 per share before items.
The updated first quarter 2010 adjusted non-GAAP earnings per share
guidance does not include the estimated impact of the previously
disclosed devaluation of the Venezuelan Bolivar. The Company has
previously indicated that it expected to record a pre-tax charge in the
first quarter of 2010 in the range of approximately $40 to $45 million.
The Company is continuing to evaluate the overall impact of the
devaluation.
Due to the unpredictability of metal and petrochemical prices, there is
no way to forecast the impact that this accounting change will have on
full year 2010 results. In a relatively stable metal and petrochemical
price environment, this change is expected to have little or no impact
on earnings over time.
Certain historical financial information adjusted for this change in
accounting method is expected to be made available at www.generalcable.com
before the release of the Company's first quarter of 2010 results.
General Cable (NYSE:BGC), a Fortune 500 Company, is a global leader 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. For more information
about General Cable, visit our website at www.generalcable.com.
Certain statements in this press release, including without
limitation, statements regarding future financial results and
performance, plans and objectives, capital expenditures and the
Company's or management's beliefs, expectations or opinions, are
forward-looking statements. Actual results may differ materially from
those statements as a result of factors, risks and uncertainties over
which the Company has no control. Such factors, risks, and uncertainties
are more fully discussed in the Company's Report on Form 10-K filed with
the Securities and Exchange Commission on March 1, 2010, as well as
periodic reports filed with the Commission.
SOURCE: General Cable Corporation
General Cable Corporation
Michael P. Dickerson, 859-572-8684
Vice President of Finance and Investor Relations
