Encore Wire Corp. (NASDAQ Global Select: WIRE), McKinney, TX, reported sales for the quarter ended March 31, 2010, were $175.2 million, up from $144.5 million in the first quarter 2009. The manufacturer reported a net loss for the quarter of $2.5 million, versus profit of $4.6 million in the prior-year period.
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Unit volumes, measured in pounds of copper contained in the wire sold during the period declined 30.6 percent in the first quarter of 2010 versus the first quarter of 2009. However, the spread between the cost of a pound of copper purchased and the price of a pound of copper sold increased by 12.3 percent, Encore Wire reported.
Daniel L. Jones, president and CEO, said: "Unit volume decreases caused by the drop in construction activity continue to create turmoil in our industry. During the quarter, a competitor exited the market by selling out to another competitor. Despite the continued volume decreases, there were positive developments, including the increase in 'spreads' during the past quarter. The spread between the price of wire sold and the cost of raw copper is a key metric in this industry and a key driver of the level of profitability. With our low-cost structure, we have strong upside leverage when the spread expands."
Encore Wire Corporation manufactures copper electrical wire for interior wiring in homes, apartments, manufactured housing and commercial and industrial buildings.
