RE:Current Quarter GuidanceIt was a shock indeed but there were signs for this.
They had mentioned on their Conference Call about problems with the upgrade of the Plate Mill and the did also mention that they are expecting reduced production on this quarter. Consider also a fire, an oil spill, an imminent strike and negotiations with the union, a couple of work accidents, lower steel prices, a recession -there were quite a few things going on.
The problem is that I thought that all this was priced in the (last) SP. Still, it is a huge drop in EBITDA and it was likely unexpected.
I am still holding and it remains my largest position -thought it was too cheap that it was a safe bet. I will continue holding, but probably know now that we are looking at least 2 years ahead to get value from this. They still remain a profitable company -even with all these issues going on, they have a growth plan (electric furnace) which will cut costs and increase output, they have a safe 5-year contract with the union, I hope they have happy employees as well (they got a rise that I cannot imagine in my current job), they are still buying back some stock and they still have a lot of cash sitting there. If this is not a long recession, I cannot imagine this company performing any worse, so I hope that we will soon hit the bottom for the SP. I don't like very much the management "tricks" though, ie they released the yearly results with a huge delay (to announce the auction), they published 2-3 "final offers" for the union, they had the voting last week and 1 week later they announce reduced guidance. In the meantime, they had a fire, an oil spill, a plate mill upgrade not in schedule, work accidents -management should focus a little bit more on the actual company and that will create value.