Shares in Chile-based iron ore firm CAP fell 6.8 percent on Monday, hitting their lowest level since 2005, after the company reported an over 90 percent fall in third-quarter earnings, which prompted Banchile-Citi to cut their stance on the stock to ‘sell’.
CAP, which makes iron ore pellets and steel products, reported after the market close on Thursday that weak prices for iron ore had led net profits down to $4.3 million in the July to September quarter, below market forecasts.
The Chile stock exchange was closed on Friday for a holiday.
“The growth of iron ore sales has been significantly slower than expected and to remain competitive the company should continue to make further spending cuts,” said brokers at Banchile-Citi, cutting their recommendation to ‘sell’ from ‘hold’ and their price target to 4,900 pesos per share.
At 1620 local time (1920 GMT) CAP was trading down 6.8 percent on the day at 5,150 pesos apiece.
Editing by Diane Craft