Rio Tinto profit estimate for 2009 cut by analysts

Bloomberg reported that Rio Tinto Group profit estimate for 2009 has reduced 40% by JPMorgan Chase & Company because of forecast declines in metal prices and production. JPMorgan said in a report that underlying earnings of Rio Tinto may be USD 4.3 billion for the year ending December 31st 2009, after Rio said fourth quarter aluminum and copper profit will drop. That’s down from their earlier forecast of USD 7.2 billion and their USD 9.6 billion estimate for 2008. ABN Amro Holding NV also lowered its 2009 forecasts for Rio Tinto by 32%. ABN Amro said that “Our earnings for Rio have fallen considerably after factoring in lower base metals prices.” It is predicting full year profit of USD 6 billion. Rio, which is scheduled to report full year profit on February 12th 2009, rose 2.8% to AUD 38.35 close on the Australian stock exchange. ABN has a hold rating on the stock and cut its target price by 13% to AUD 34.48. Credit Suisse Group lowered its 2009 and 2010 earnings forecasts for Rio by 31% on lower forecast prices for copper and aluminum and lower production volumes of iron ore and coking coal. ABN Amro cut its copper forecast for this year by 33% to USD 1.60 per pound and its aluminum forecast by 27% to 75 cents per pound. It added that Rio may need to sell JV assets or consider selling up to USD 5 billion of shares to reduce debt. (Sourced from Bloomberg)