BHP Billiton has reported a 30 per cent slide in annual profit excluding write-downs to $US10.72 billion, above analysts' forecasts of around $US10.2 billion. Analysts reacted positively to the numbers, saying they will cause some upgrades in the market place.
CAMERON PEACOCK, MARKET ANALYST, IG MARKETS
"The scale and financial clout which BHP enjoys over its peer group is clearly evident when you compare its result to that of its smaller rival Xstrata.
"To produce a record net operating cash flow of US$18.9 billion against the backdrop of the global financial crisis is certainly impressive and demonstrates the true resilience of the company's financial strength."
NEIL BOYD-CLARK, PORTFOLIO MANAGER, FORTIS INVESTMENT PARTNERS
"Broadly quite encouraging, it's a little ahead of what the market was looking for. There's a question mark over what BHP are going to do with their strong balance sheet posiition. I would have thought (the result) would be reasonably well received by the market."
ADAM DIXON, PORTFOLIO MANAGER, AUSBIL DEXIA
"That headline number is going to cause some upgrades in the market place. The market has been caught short on the results in the base metals division. I think the market might be slightly disappointed with the iron ore number, but the base metals will likely offset it, so we'll see some earnings upgrades.
"In terms of commentary, of course there's a cautionary tone to what they are saying. They are obviously going to wait and see what the level of real underlying demand is once the restocking phase has been concluded."
GAVIN WENDT, ANALYST, FAT PROPHETS
"The result was bang in line with what we were expecting so we are pleasantly surprised. BHP is expecting Chinese consumption just to ease off a little bit, we won't see the same rate of growth in the second half of this year as in the first.
"In the short term when commodities start to pick up, they are expecting the supply side to also pick up so that could dampen to some degree the outlook for commodity prices. BHP is being cautiously optimistic when it comes to its outlook."
TIM SCHROEDERS, PORTFOLIO MANAGER, PENGANA CAPITAL
"It's broadly in-line with expectations. Adding back the exceptional items and then accounting for provisional pricing of copper in particular, the result may be slightly disappointing. The dividend is in line with expectations, but some people could be disappointed by no increases in dividend and lack of capital management initiatives.
"The profit numbers themselves don't cause any concerns, the outlook comments are cautious. BHP is fairly guarded about the the outlook as the ongoing demand is created by stimulus packages.
"On the commodity front, they are worried about the influence of end user restocking and strategic stock piling build in China."
Reuters
