May 10, 2011 / 4:25 AM / in 7 years

Update 2-N. American Palladium cuts FY output view, shares fall

* Q1 EPS $0.06 vs $0.14 year-ago

* Q1 rev rises five-fold to C$36.7 mln

* RBC Capital cuts co to sector perform from top pick

* Shares fall 19 pct (Adds analyst comments in paragraph 5,6; updates share movement)

May 10 (Reuters) - North American Palladium Ltd’s quarterly loss narrowed, but the precious metals company’s shares fell 19 percent as it cut its 2011 palladium production forecast.

Shares of the Toronto, Ontario-based company were trading down at C$4.55 on Tuesday morning, making it the second-most heavily traded stock on the Toronto Stock Exchange.

The company, which plans to shift focus to development from production, cut its full-year production forecast to 145,000-155,000 ounces of palladium.

It had earlier forecast 165,000-175,000 ounces.

Earlier in the day RBC Capital Markets downgraded the company to “sector perform” from “top pick” and lowered the price target on the stock to C$5.70 from C$8.65.

“The first-quarter results disappoint in every respect - lower production, lower grades, lower tonnage, higher costs,” analysts said. (Reporting by Aftab Ahmed and Amruta Sabnis in Bangalore; Editing by Don Sebastian)

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