Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Gambardella - J.P. Morgan.
Michael Gambardella - J.P. Morgan
In your guidance that you gave for next quarter, what is the LIFO assumption in that guidance?
L. Patrick Hassey
I'm going to let Rich take that one, Mike, and I think I'll add anything if it's not fully covered from my standpoint.
Richard J. Harshman
Yes, Mike, well I think at this point the LIFO assumption reflects the assumptions we made that drove the LIFO benefit here in the third quarter. Obviously, the visibility that we have into a wide variety of the raw material costs is no greater than probably your visibility. I don't think anybody would have predicted that nickel would be where it is today. I think that that remains potentially volatile as we move through the quarter. I think we're seeing the same things, quite frankly, in chrome and in moly and in titanium scrap and nickel bearing scraps as well.
So the assumptions we made at the third quarter, the guidance we have is consistent with that, and we'll just have to see where it all ends up.
Michael Gambardella - J.P. Morgan
But in terms of a dollar amount in your guidance there for the quarter?
Richard J. Harshman
Yes, I'd rather not get into identifying specific assumptions we make on each individual raw material element because they change, quite frankly, as we move through the quarter, and it all depends upon what the mix is in our inventories as well. So I'd rather not get into the specific assumptions we're making on an element-by-element basis.
Michael Gambardella - J.P. Morgan
Can you say if the LIFO credit is bigger or smaller than it was in the third quarter?
Richard J. Harshman
I think it's potentially in a range that might be a little bit smaller to something that might be similar.
L. Patrick Hassey
Mike, just a note. We've read some people's comments around the third quarter. Let me just add this to those comments around LIFO.
As we go through the third quarter and we had this rapidly decreasing raw material price index for elements going into all of our products, we had higher priced materials running through the quarter. And so we have a negative affect and a margin compression on all of our products because of the higher material costs for the material that is in process and closing out and selling at lower prices.
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