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BHP reported full-year revenue of about 30.9 billion dollars, slightly ahead of what analysts expected. Profits also came in higher than predicted at 2.68 dollars per share. The company is paying out its largest dividend in four years, a sign of confidence in its ability to generate cash even as it spends heavily on new projects.
The results show the company's plan to shift toward copper is working. While iron ore has traditionally been the main driver of the business, record copper prices and higher output are now doing more of the heavy lifting. This is a key part of the company's goal to supply the metals needed for electric vehicles and power grids.
BHP and the unions representing workers at Port Hedland in Western Australia have failed to agree on a new wage contract. Port Hedland is the world's largest export hub for iron ore, which is the raw material used to make steel and remains the primary source of cash for the company.
While operations are continuing for now, a standoff at this specific port is always worth watching. Any potential strike or work stoppage there would immediately choke off the company's ability to get its most important product to global customers.
Source: Reuters
NexGen Energy has confirmed it is in regular talks with BHP regarding its Rook I uranium project in Saskatchewan. NexGen is looking for about 1 billion dollars to develop the site, and BHP is considering taking an equity stake, which means buying a portion of the company's shares to help fund the work.
While BHP is currently focused on copper and potash, uranium would fit its goal of producing materials for a lower-carbon world. This is still in the early stages, but it shows BHP is looking for new ways to grow as it moves away from fossil fuels like coal.
Source: Reuters
BHP is set to report its latest numbers today. Analysts are looking for about 30.2 billion dollars in revenue and earnings of about 2.67 dollars per share. Beyond the headline numbers, the focus will be on how well the company is managing costs in its iron ore business and whether its shift into copper and potash remains on track. These projects are central to the company's plan to move toward materials needed for electric vehicles and renewable energy.
Unions representing workers at Port Hedland in Western Australia have called for a two-day strike this weekend. This hub is the primary exit point for the company's iron ore, which is its most profitable business. While a two-day stoppage is short, the inability to reach a wage deal after weeks of talks suggests a risk of longer disruptions.
Iron ore generates the majority of the cash the company uses to pay dividends and fund its new copper projects. Any prolonged halt at Port Hedland would directly hit the company's ability to move its product to customers in China. We are watching to see if this weekend's action leads to a more permanent resolution or a wider standoff.
Source: Reuters
BHP has a steady habit of clearing the bars set for it, beating analyst profit targets in three of the last four reports.
| Expectation | |
|---|---|
| EPS | $2.62 |
| Revenue | $29.27B |