Rio Tinto Plans Cost Reductions and 4 Hot Stocks Seeing Action Today
Rio Tinto Plc (NYSE:RIO): As the volatile short-term environment continues, Rio Tinto has intentions to continue its cost reductions, mainly regarding operating, evaluation, and sustaining capital costs across the entire business. The company’s drive for the reduction of service and support costs has currently saved $500 million a year. The total annual capital expenditure on projects that have already been approved will likely peak in 2012, but the short-term macroeconomic outlook continues to be volatile. Chinese economic growth continues to be robust but moderating and is slow and uneven in developed economies. Rio Tinto believes that China’s stimulus packages will be effective progressively following the Chinese leadership change, influencing it to reduce its estimates for Chinese GDP growth for the year to being slightly shy of eight percent. Iron ore prices saw a recovery to some extend following a period of sharp decline, but the firm believes that they will continue to be volatile in the near future. Rio Tinto’s copper production will likely rise from 2013 due to better grades and investments at Kennecott and Escondida along with the beginning of production from the Oyu Tolgoi mine in Mongolia. From 2011 to 2015, Rio Tinto believes it will achieve a cumulative annual growth rate reaching 13 percent for copper.
Bank of America (NYSE:BAC): On Tuesday, Swiss bank Julius Baer announced that it will cut nearly 1,000 jobs for cost reduction. In August, Julius Baer and Bank of America Merrill Lynch reached a deal for the purchase of its private banking operations outside the United States and Japan for a total of about $880 million. As part the company’s business integration plans, Julius Baer stated that it now plans to cut the bank’s combined 5,700 work force by 15 to 18 percent.
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Facebook, Inc. (NASDAQ:FB): Twitter.com CFO, Ali Rowghani, faces the challenge of taking the company in the direction of an IPO. Although there is not set timetable, Twitter will likely be the most prominent consumer-Web company making a market debut since Facebook on May 17, and everyone knows how that debacle resulted in Facebook’s value being reduced to half. Rowghani will have to place Twitter’s price high enough for the funding Twitter finds necessary without placing the valuation too high than it deserved, according to Bloomberg.
AT&T, Inc. (NYSE:T) and IBM (NYSE:IBM) announced a business agreement under which they are to deliver a highly secure, first-of-its-kind “network-enabled” cloud service using private networks instead of the public Internet. The companies intend to combine AT&T virtual private networking and IBM SmartCloud Enterprise+ cloud capabilities along with new technology from AT&T Labs for the development of a new, fast, and highly-secure shared cloud service. Targeted toward Fortune 1000 companies worldwide, the service will is to be offered during the beginning of 2013 as a powerful new option for clients deploying cloud solutions demanding high levels of security and availability. Often, businesses cite security as the main thing inhibiting cloud computing adoption.