Rio Sees Brighter Future, reveals better than Expected Profit

Submitted by Jim Thesiger on 12 February, 2010 - 15:10

One of the leading Australia based miner Rio Tinto (RIO), a company that focuses on the production of iron ore, copper and coal have seen a sharp rise in its share price after it revealed its better than expected annual earning figures on Thursday. While making statement on the earnings, Rio authority stated that the under lying profit of the company was as much as $US6.3 billion where previously the analysts expected it to be $US6 billion.

Rio Tinto remained optimistic about its performance for the year 2010 when it came up with the commentary where the miner claimed that the demand of its commodities were rising significantly. According to the miner, the factors that played a key role in the recovery of the prices of the commodities were likely to influence the market in 2010 as well. The shares of Rio Tinto opened at 3.9 percent today which is higher than where it was during yesterday’s closing before going down a bit. While the broader market was trading flat, the stocks of the mining giant went up by $2.03 or 2.91 percent lately to $71.75.

Juliette Saly, a CommSec market analyst stated that the stocks of the company went up just before the company announcement of its earnings. The figures represented a very impressive result, especially with the iron ore market where the price of iron is advancing towards the contract negotiation season. In her statement, Ms. Saly also included that the recently published Rio figures will definitely give more confidence to the investors about the company which was going through a difficult time lately. The CommSec market analyst also emphasised on the fact that it is important for the miners to give more focus on the Chinese market for their growth rather than the US market. It is to be mentioned that Rio Tinto has recently named Ian Bauert as its new China managing director in an attempt to strengthen its relationship with that country.