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Why the Rio Tinto Limited (ASX:RIO) share price is falling today

Rio Tinto Limited (ASX: RIO) shares are down 3.5% to $78.77 at the time of writing off the back of its half-year results presentation and the announcement of a share buy-back programme.

According to today’s ASX release, Rio will commence an additional US$1 billion share buy-back of Rio plc’s ordinary shares – in addition to on-market buy-backs in place from September last year and February 2018.

If Rio investors seem ambivalent about the buyback, Rio’s interim dividend of $2.2 billion should sweeten the deal, with Rio’s half-year results showing robust financial performance, EBITDA of $9.2 billion, and a dividend of roughly $1.70 per share.

Sentiment may also have been knocked by a 38% decrease in free cash flow and a 34% increase in expenditure with issues resolving a tax dispute with the Mongolian government also playing on investors’ minds.

Peers like BHP Billiton Limited (ASX: BHP) are also in the red today, down 1.8% to $34.42 at the time of writing, as oil producers Woodside Petroleum (ASX: WPL) and Oil Search Limited (ASX: OSH) shares react to oil prices tumbling overnight.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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