The positive momentum behind shares in Rio Tinto (RIO) was checked this week by a weaker than expected second-quarter production update from the commodities giant. Output from both Rio's iron ore and copper divisions disappointed analysts, who had predicted stronger contributions than the 80.9m tonnes of iron ore and 141,000 tonnes of copper mined in the three months to June.
Despite the company's reassurance that it would hit previously announced full-year production targets for the metals, investors were not convinced, sending Rio's shares down 3 per cent in London. This was further underscored by the 4.4m carats (mct) of diamond output for the quarter, which thanks to a slower ramp-up of underground operations at Argyle fell below market expectations and led management to downgrade full-year guidance from 21mct to 18-21mct.
Canaccord Genuity said these numbers would likely spark a downgrade in the broker's full-year adjusted EPS forecasts, which prior to this announcement stood at $1.32.
