Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from William Stein - Credit Suisse.
William Stein - Credit Suisse
I’m a bit confused by the result, in particular you stated at the start of the call that you got better prices than you expected and slightly higher volumes than expected and yet the revenue fell below your guidance for the quarter. Can you help us understand how that happened, especially considering the very big earnings upside?
Gregory Kenny
Yes, we thought we were going to have flat volumes from Q4 run rate; we’re actually up 2% and obviously you get into a long discussion of sales mix and where you sell obviously metal intensive products have a higher revenues than say electronic cable, which is less metal intensive. When we looked at the first quarter, we saw lower raw materials when we communicated in the middle of the first quarter; about the fourth quarter, what we thought would happen in the first quarter.
We thought pricing for the spot market will deteriorate faster than it did. So, while it deteriorated it did not deteriorate as quickly, which caused us to actually earn more than we had first bought, as well as volume was up slightly.
William Stein - Credit Suisse
But the revenue was below your guidance range, how did that happen?
Gregory Lampert
Well, again there’s the mix issues to go into there; well there’s also currency assumptions and a little bit on the metal assumptions.
Gregory Kenny
I was trying to say, Will, is if I sell a foreign exchange cable that’s massively heavy as it has 50% copper and if I sell at a foot of electronic cable, it’s thin as your pinky. So we’re also trying to understand what was sell-through revenues, if we sell lots of transmission cables, aerial transmission cables. Revenues can add up in that area and if you sell data cable, you don’t see if revenues pile up as quickly, because the metal intensiveness varies dramatically.
William Stein - Credit Suisse
So the mix was very different than you anticipated, is that right?
Gregory Kenny
We’re a large company in 100 countries Will, so we can be off by millions and I think we’ve proven that. We don’t have a backlog beyond two weeks, other than some major projects or requirements performed with the utilities. So, we are not operating off a year long backlog, except with our high voltage underground cables and submarine cables. So I think we probably will always be off a bit. The other is we are looking at obviously copper movements that are changing as well by the day, we saw a huge amount of fluctuation.
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