Encore Wire (NASDAQ:WIRE) stock climbed to an over 6-week high on Tuesday after the wire manufacturer posted strong Q2 results, helped by solid demand.
WIRE reported Q2 EPS of $10.71 vs. $8.82 in Q2 2021. Revenue increased 12.6% Y/Y to $838.24M.
Copper volume sold grew 2.7% Y/Y. Average selling price of wire per copper pound sold fell 0.7% Y/Y, while average cost of copper per pound purchased increased 3.2%.
Aluminum wire represented 15% of Q2 net sales. WIRE said aluminum wire volumes increased Y/Y, without disclosing the figure.
"Stable demand, coupled with global uncertainties, persistent tightness in availability of raw materials, and general inability of the sector to meet demand for timely delivery of finished goods, kept spreads strong throughout H1," said WIRE CEO Daniel Jones.
"This marks the third quarter of volume growth driven by continued increased demand for data center, healthcare and renewable product solutions," he added.
WIRE has no long-term debt and its revolving credit line remains untapped. It had $469.5M in cash at Q2-end.
Capital spending in 2022-24 will expand vertical integration in WIRE's manufacturing processes to cut costs and will modernize select wire manufacturing facilities.
WIRE projects capex of $150M-$170M in 2022, $150M-$170M in 2023 and $80M-$100M in 2024. These investments will be funded with existing cash and operating cash flows.
Shares of WIRE declined ~14% YTD.