Encore Wire raises income in second quarter

Encore Wire Corp., McKinney, Texas, has announced net income of $210.5 million in this year’s second quarter, representing a 14.96 percent rise from the $183.1 million it earned in the second quarter of last year.

The producer of copper and aluminum wire and cable products, which also runs a wire recycling (chopping) line, says its net sales in this year’s second quarter were $838.2 million, a 12.6 percent increase of percent from the $744.4 million in sales during the second quarter of 2021.

“The average selling price of wire per copper pound sold decreased 0.7 percent in the second quarter of 2022 versus the second quarter of 2021, while the average cost of copper per pound purchased increased 3.2 percent,” the company says. Encore Wire does not disclose to what extent scrap purchases and wire chopping costs figure into its materials margins.

So far in 2022, the company says its gross profit percentage for the first six months was 36.2 percent, which compares with just a 30.4 percent figure for the six months of 2021. “The average selling price of wire per copper pound sold increased 15.6 percent in the six months ended June 30, 2022, versus the six months ended June 30, 2021, while the average cost of copper per pound purchased increased 10.2 percent for the same period comparison,” according to the firm.

Aluminum wire represented 15 percent of the company’s net sales in the second quarter, boosting the first-half figure to 13.4 percent. “Aluminum wire volumes and spreads have increased for both the quarter and six months ended June 30, 2022, compared to the comparative periods in the prior year,” Encore says.

Daniel L. Jones, chairman, president and CEO of Encore, says, “The results for the second quarter of 2022 establish another high-water mark both financially and operationally for Encore Wire. Our continued strong earnings in 2022 validate that our single-site campus model is a strategic competitive advantage in the market today, giving us unmatched flexibility to quickly pivot and adapt to ever-changing market dynamics.”

The company makes all its products in McKinney and invites its customers to ship wire and cable scrap to its facility. Via Encore’s Scrap Purchase Program, the firm will ship empty, folded Gaylord boxes along with products it sells. Customers can fill the Gaylords with scrap, obtain a purchase order number from Encore, ship the boxes to McKinney and receive payment for the scrap within 60 days, Encore says on its website. 

Looking ahead, Jones says, “This marks the third consecutive quarter of volume growth driven by continued increased demand for data center, health care and renewable product solutions. We believe existing market conditions and the current outlook support existing volume levels as well as support gross margin abatement continuing at a gradual pace.”