PREVIEW-General Cable Q4 profit likely to top market

* WHAT: Q4 results

* WHEN: Feb. 11 after market

* StarMine SmartEstimates suggests 4.1 pct upside surprise

* High copper prices may weigh on Q4 margins

* Growth in Europe likely to be muted: analysts

By Bhaswati Mukhopadhyay

BANGALORE, Feb 10 (Reuters) - General Cable Corp (BGC.N) is expected to report fourth-quarter earnings slightly above analysts' view, helped by cost cuts, but there are concerns about the impact of high copper prices on the company's performance in the quarter.

The company, which makes copper, aluminum and fiber optic wire and cable products, has seen high growth rates in the past one year.

However, it is seeing some weakness in demand as its fortunes are closely tied to the power and construction markets. "General Cable's products use a lot of copper, the price of which jumped in the latter half of 2009, but the demand for its cables is relatively weak," analyst Nat Kellogg of Next Generation Equity Research told Reuters.

Analysts said the company is expected to see margin pressure in the quarter as it has been unable to pass on rising input costs to the market.

Copper prices shot up nearly 140 percent last year on strong demand from China and a weaker dollar.

For the fourth quarter, analysts on average expect General Cable to earn 24 cents a share, on revenue of $1.07 billion, according to Thomson Reuters I/B/E/S.

According to StarMine's SmartEstimates, which places more weight on recent forecasts by top-rated analysts, the company should report a profit 4.1 percent above the consensus.

General Cable's key end-markets in transmission and distribution continue to see pressure in the short term.

The company has been hurt more because it is on Last in First Out (LIFO) accounting, while most cable producers and distributors are on First In First Out (FIFO) accounting, analyst Jeffrey Beach of Stifel Nicolaus & Co said.

"This means that most of the copper cable producers and distributors do not see cost pressures for months after copper moves up, while General Cable feels the impact every day," Beach added.

Analysts do not expect to see any meaningful growth from North America and Europe.

"In Europe, Spain accounts for a significant portion of General Cable's sales and it is likely to remain in deep recession through 2010," Stifel's Beach said.

The Europe and North Africa segment accounted for about 35 percent of the company's total revenue in 2008. FALLING COPPER MAY HELP

Analysts, however, said since copper prices have started dropping in 2010, it should bolster the company's growth going forward.

Price of copper is falling as demand from China tails off. Copper prices in London fell to $6,225 a ton last week, their lowest since Oct. 19 last year. [ID:nLDE6180TG]

"I think it will be a slow start to the year, but the second half will be quite a bit better than the first half," Next Generation's Kellogg said.

Industry experts are expecting emerging markets to drive growth for the company.

General Cable -- which competes with Belden (BDC.N), France's Nexans (NEXS.PA) and Dutch cable manufacturer Draka DRAK.AS -- is likely to see growth in Latin America, Asia Pacific and the Middle East, analyst Stuart Bush of RBC Capital Markets said.

Analysts see long-term opportunity in big transmission projects. They also expect order trends to stabilize in 2010.

"We expect General Cable to exceed consensus 2010 and 2011 revenue forecasts," Stifel's Beach said. (Reporting by Bhaswati Mukhopadhyay; Editing by Unnikrishnan Nair)