Rio Misses Estimates - Analyst Blog

Rio Tinto Plc. (RIO) reported weak financial results for 2012. The company’s net loss was $2,990.0 million during the period, facing a huge decline of 151.0% year over year from net earnings of $5,826.0 million reported in 2011. The results were hurt by lower market prices and increasing raw-material costs. Loss per ADR came in at $1.61 compared with earnings of $3.04 in the comparable period last year.

Underlying earnings per ADR were approximately $5.03, down 38% from $8.09 earned in 2011. Reported results missed the Zacks Consensus Estimate of $5.48.

Consolidated sales in the year 2012 moved down to $50,967.0 million from $60,537.0 million recorded a year ago. The sales also missed the Zacks Consensus Estimate of $53,654.0 million. The decline in sales resulted from lower prices across almost all its products lines.

The company achieved high iron ore production in the year, with the total production representing roughly 78.7% of the global production. Rio’s bauxite production increased 11.4% year over year to 31.4 million tons along with an increase of 19.2% in alumina production to 7.0 million tons. Also, uranium production increased 38.3% year over year to 9,760.0 lbs. However, mined gold production faced a decline of 56.1% to 294,000.0 ounces.

Operating loss in the reported period stood at $1,153.0 million compared with an operating profit of $13,940.0 million in the year-ago period. Underlying EBITDA plunged 40.2% to $9,303.0 million from $15,549.0 million in the comparable period last year.

Net cash generated from operating activities was $9,368.0 million compared with $20,030.0 million in the year-ago period. The company’s capital expenditure increased to $17,418.0 million in the reported period from $12,298.0 million in the same period last year. The rise in expenditure was due to Rio’s investments in property, plant & equipment and intangible assets.

Cash and cash equivalents came in at $7,082.0 million compared with $9,670.0 million a year ago. Rio also announced a 15.2% year-over-year hike in its dividend payout to $1.67 per share.

Rio expects its aluminium, alumina, bauxite and copper production to improve in the coming year. The stock currently holds a Zacks Rank #3 (Hold). Other stocks worth a look in the industry are BHP Billiton Plc. (BBL), Denison Mines Corp. (DNN) and Xstrata Plc. (XSRAY); each carrying a Zacks Rank #2 (Buy).

BILLITON ADR (BBL): Free Stock Analysis Report

DENISON MINES (DNN): Free Stock Analysis Report

RIO TINTO-ADR (RIO): Free Stock Analysis Report

 (XSRAY): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research