'You're an embarrassment': Mining CEO blows his top at analysts

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'You're an embarrassment': Mining CEO blows his top at analysts

By Joe Deaux

The CEO of the largest US iron ore producer exploded at Wall Street analysts on Friday, saying they can't read financial reports and should resign.

Lourenco Goncalves told analysts on a conference call that they didn't understand his company, Cleveland-Cliffs, or even their own businesses.

"Totally avoidable. Self-imposed. Self-inflicted": Cliffs' CEO Lourenco Goncalves:

"Totally avoidable. Self-imposed. Self-inflicted": Cliffs' CEO Lourenco Goncalves: Credit: Will Russell

"You guys should resign for your lack of knowledge of things," the CEO said. "You are a disaster. You are an embarrassment to your parents."

The rant earned Goncalves an invitation to appear later on CNBC, but Cleveland-Cliffs shares sank nearly 8 per cent in afternoon trading.

The call occurred after the company reported a third-quarter profit of $US437.8 million ($615 million), slightly below expectations. After giving a routine rundown of the quarter, Goncalves went on the attack during a question-and-answer period.

'Why don't you ask a freaking question?'

The CEO seemed particularly perturbed with one analyst, whom he did not name.

"We are going to screw this guy so badly that I don't believe that they will be able to only resign. They will have to commit suicide," Goncalves said.

Later, Goncalves called out Goldman Sachs analyst Matthew Korn, asking him, "Why don't you ask a freaking question?" He was disappointed to learn that the analyst apparently was not on the call.

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"You can run, but you can't hide," Goncalves said just before ending the call. He vowed to catch up with the analyst at a Goldman Sachs conference, and suggested that the analyst bring an unidentified colleague who studies commodities.

"It will be bad no matter what, but it will be a lot worse if you're alone," the CEO said.

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The iron-ore mining company said that excluding discontinued operations it earned 64 US cents per share in the third quarter. The average estimate of five analysts surveyed by Zacks Investment Research was for 66 US cents per share.

In afternoon trading, the shares were down 88 US cents, or 7.7 per cent, to $US10.60. They pared earlier losses after Goncalves announced he will "buy the stock back with two hands," if prices continue to fall.

Buying back shares "will all be done to inflict maximum pain to this guy," Goncalves said of one of his company's naysayers. "I wake up in the morning every day, looking at this guy and then go to bed at night every day thinking about this guy. And that's a bad place to be. That's the message that I would like to deliver in this call."

Goncalves later said on CNBC that Goldman Sachs had used the wrong share count - 303 million instead of 310 million - in calculating estimated earnings per share. Goldman Sachs declined to comment or to make its analyst available for an interview.

The CEO defended his comments on the call. "I don't believe I berated anyone," he said. Most CEOs, he said, are "cookie-cutter people ... I'm different."

Bloomberg/AP

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