Inmet Mining Corp.'s second-quarter results came in well below street estimates, and analysts were quick to cut their targets.

Toronto-based Inmet reported earnings per share of $1.40 compared to $2.86 in the same quarter last year. Desjardins Securities analyst John Redstone noted that much of the variance is related to foreign exchange losses. But he also wrote that 31¢ of it is a result of higher-than-expected operating costs as Inmet deals with many of the same problems plaguing the rest of the industry.

He cut his target on Inmet to $97.70 a share, down from his previous forecast of $102.00 a share.

That is still well above the current level of about $62.00. Inmet shares has been dragged down by delays at its Las Cruces and Cerattepe projects. The company has also launched a hostile bid for joint venture partner Petaquilla Copper Ltd. that needs to play out.

Fraser Phillips of RBC Capital Markets also cut his outlook on Inmet, lowering his target to $78.00 (from $85.00). That reflects lower-than-expected production in 2008 and higher-than-expected costs going forward. He also anticipates a start-up at Las Cruces in late 2009, which is about a year later than Inmet anticipates (the project has been held up by a water permit suspension).

"We believe uncertainty around [Inmet's] key projects will likely limit its share price potential in the near term," he wrote in a note.

Mr. Redstone rates Inmet a "buy" and Mr. Phillips calls it a "sector perform."

Peter Koven