(Adds cost target guidance, share movement, analyst quote)
Oct 26 (Reuters) - Fortescue Metals Group Ltd FMG.AX on Thursday reported a slight rise in iron ore shipments in the 2018 fiscal year's first quarter, while costs edged lower.
The world's fourth-largest producer of iron ore said quarterly shipments rose to 44 million tonnes from 43.8 million tonnes a year ago.
Cash production costs averaged a record low $12.15 per wet metric tonne over the quarter, 10 percent less than the year-ago period.
Fortescue maintained its cost target for the year at $11 to $12 per wet metric tonne.
"Despite maintaining full-year guidance and continuing along the path of cost reduction, it looks like the broader market was expecting more from Fortescue today, considering the stock is down more than 2 percent in early trade," said Kurt Mayell, Asian equity hedge analyst, CMC Markets Asia Pacific Pty Ltd.
The miner's shares dropped as much as 3.8 percent against a 0.2 percent dip on Australia's S&P/ASX 200 index .AXJO .
The company, whose shares have lost over 14 percent so far this year, said last month it was keen to diversify its business by investing in energy infrastructure and exploring for gold and base metals.