Coverage: CEO tears into analysts during conference call
The CEO of a mining company exploded at short-sellers and Wall Street analysts on Friday, saying they don’t know how to read financial reports and should quit their jobs.
David Koenig of the Associated Press had the news:
“You guys should resign for your lack of knowledge of things,” said Lourenco Goncalves, the CEO of Cleveland-Cliffs Inc. “You are a disaster. You are an embarrassment to your parents.”
Goncalves directed much of his fury at a Goldman Sachs analyst whom he accused of “bad math” in calculating that the company’s third-quarter earnings per share were less than expected.
The rant drew unusual attention to Cleveland-Cliffs, which operates iron-ore mines in the U.S. and Australia, and earned Goncalves an invitation to appear on CNBC, which he called “a big accomplishment.”
However, the company’s shares sank 10 percent in morning trading Friday before recovering to close down 43 cents, or 3.8 percent, at $11.05.
Claudia Assis of MarketWatch.com reported that the company’s results beat expectations:
The company earlier Friday reported third-quarter GAAP earnings that beat Wall Street expectations, announced it was resuming a dividend payment, and highlighted that it was fresh from renewing a union contract.
Goncalves fired his first salvo soon after the conference call’s first remarks wrapped up.
He told Lucas Pipes, an analyst with B. Riley FBR who had a question about the dividend, that he was “one of the best” but some of the analysts “can’t read numbers.”
It quickly went downhill from there and turned more personal, with Goncalves appearing to direct most of his vitriol at Goldman Sachs analyst Matthew Korn.
Despite the company paying down some debt, it had been asked earlier on Friday how it was possible that its net debt was still the same, Goncalves said.
Michael Sheetz and Thomas Franck of CNBC.com reported that Goncalves has attacked analysts in the past:
Goncalves specifically went after Goldman Sachs analyst Matthew Korn, saying “you can run but you can’t hide.” Korn has a ‘hold’ rating on the shares.
The chief executive appears to be upset at the stock market’s initial reaction to the company’s third-quarter results. The stock fell nearly 6 percent on Friday even after reporting an increase in profit and improving revenue. Excluding some items however, earnings per share in the period were 64 cents, below the 66-cent consensus estimate from analysts, according to FactSet.
This is not the first time Goncalves has been openly critical of Wall Street analysts. During the company’s earnings call in October 2014, Goncalves told Wells Fargo analyst Sam Dubinsky that he was “not going to answer” Dubinsky’s question, “because you already knew everything about my company.”