What You Need to Know About BHP Billiton's Results
LONDON -- Mining giant BHP Billiton is due to announce its half-year results on Wednesday next week (20 February).
At the time of writing, the shares of this FTSE 100 heavyweight are trading at 2,151 pence -- up 8% over the past six months in line with Footsie.
How will the BHP's business have performed in the first half compared with last year's first half? And is the group on track to meet analyst consensus forecasts for this year's key full-year numbers? Here's your cut-out-and-fill-in table!
|H1 2011/12||FY 2011/12||H1 2012/13||Forecast FY 2012/13||Forecast FY Growth|
|Underlying earnings per share (EPS)||$1.87||$3.22||?||$2.75||-14.6%|
|Dividend per share||$0.55||Final: $0.57|
Revenue and earnings
The big miners of the FTSE 100 are all expected to show revenue and earnings declines for 2012 as a result of weak commodity prices and industrywide cost pressures. BHP is no exception, although this most diversified of miners is expected to suffer less than rivals such as Rio Tinto.
If BHP's revenue and earnings for the first half to December 2012 are half the forecasts for the full year to June 2013, revenue would be 34.4 billion pounds and EPS $1.37. Those numbers also happen to be broadly in line with the preceding second half, which saw revenue of $34.7bn and EPS of $1.35.
BHP has "a progressive dividend policy that seeks to steadily increase, or at least maintain the dividend in US dollars at each half-yearly payment." As the last half-year dividend was $0.57 a share, shareholders should expect no less than that in the upcoming results -- which would put the company on track to meet analyst forecasts for a full-year payout of $1.18.
At the recent share price of 2,151 pence, BHP's forecast yield is 3.4%, which is the best yield of the big miners and a tad better than the FTSE 100 average. The forward price-to-earnings ratio, incidentally, is a below-market average 12.5.
Divestments and cost cutting
In the prevailing challenging economic conditions for the industry, many asset values have been written down and companies have been trying to divest non-core assets and cut costs.
There were exceptional asset writedowns of $3.3bn during the last full year, and further exceptionals of $0.5bn as a result of the closure or suspension of operations that had become uneconomic. In the upcoming results keep an eye out for further asset writedowns, and -- as the viability of other high-cost operations was still being assessed at the time of the last results announcement -- for further closures or suspensions of operations.
Look out also for news of any further planned divestments (there were a number of significant disposals during the first half), and for whether the company has "substantially reduce[d] operating costs and non-essential expenditure across the business" as it promised it would six months ago.
Many blue-chip companies in the natural resources sector are currently trading on value ratings. But if you fancy being a little more adventurous and want to learn about how to really strike it rich in the resources sector, I recommend you download an exclusive Motley Fool guide.
This free guide for private investors is available for a limited time only -- so do hurry if you want an intelligent assessment of an area of the market with the potential to give you spectacular returns. The guide can be in your inbox immediately: simply click here.
The article What You Need to Know About BHP Billiton's Results originally appeared on Fool.com.G. A. Chester does not own shares in any of the companies mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.