We had a chance to take in a little R&R this weekend at a farm we go to in Wisconsin. Looking at the cows and pigs, I was trying to find a topic that may be fitting for the sights when lo and behold I stumbled upon this story.
The plethora of headlines highlighting who is doing well in a rising steel market never ceases to amaze me. Check out this article on US metal distributor Reliance Steel & Aluminum’s second quarter earnings results. According to the article, David H. Hannah, Chairman and Chief Executive Officer of Reliance said, “The 2008 second quarter turned out to be quite a bit better than we had originally anticipated. The main reason for the increased earnings was higher carbon steel prices, which resulted in higher gross profit margins as we quickly passed through the increases to our customers.”
Now if that isn’t a brilliant earnings strategy I don’t know what is. He’s almost gloating about his company’s performance which had nothing to do with any apparent: operational improvements, better customer service, acquisitions of new clients or adding any kind of value. As they say, a pig will eat just about anything put in front of it and will keep eating and eating until it can’t get any bigger. But the good news for metals buyers is we all know who will get slaughtered in the end. I can’t wait to get out my Smokey Joe when the markets turn.