Rio Tinto Group is a global mining company operating as a dual-listed stock, with shares trading on the Australian Securities Exchange and the London Stock Exchange. The London shares, Rio Tinto (RIO) trade on the New York Stock Exchange as American Depositary Receipts (ADRs).
Rio Tinto is a metals mining and production company with a global presence. Mining operations are primarily in North America and Australia, but the company notes that Rio Tinto operates in 50 countries. The company divides its business into five main product groups:
• Diamonds & minerals.
• Energy, primarily coal mining.
• Iron ore.
Rio Tinto publishes in-depth financial information just once a year in the company's annual report. The Rio Tinto fiscal year matches the calendar year. In 2010, the company saw net earnings jump to $14.3 billion, up from $4.8 billion in the recession year of 2009. Net income per ADR in 2010 was $7.09. Full year 2010 revenue was $60.3 billion.
The annual report breaks down the net income by product group. Iron ore production generated just over two-thirds of Rio Tinto's profits. Copper was No. 2 on the list, producing 17 percent of the profits. The other three groups generated the remaining 15 percent of 2010 profits.
Growth by acquisition
In April, Rio Tinto had acquired a majority interest in Australian mining company Riversdale Mining following a takeover offer made in December 2010. Riversdale is primarily a coal mining company and generated close to $100 million in revenue in 2010.
The Royal Bank of Scotland has initiated coverage on RIO with a buy rating on the stock. The analysis notes that RIO trades at a 16 percent discount to competitor and buy-rated BHP Billiton. The consensus estimate for the RIO 2011 earnings per share is $9.70, pointing to a 50 percent growth in net income for the year.
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