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BHP Billiton's (BHP) 1H FY18 Earnings & Revenues Up Y/Y

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Mining giant, BHP Billiton Limited (BHP - Free Report) , reported robust financial results for first-half fiscal 2018 (ended Dec 31, 2017). Shares of this Zacks Rank #3 (Hold) company rallied 2.3% to $47.60 on Feb 22, post the broadcast of results.  

Earnings

For first-half fiscal 2018, earnings per American Depositary Share (ADS) came in at nearly 76 cents per share, up 25% year over year.

Revenues

Revenues for first-half fiscal 2018 totaled $21.8 billion, up from $18.8 billion recorded in the prior-year period.

BHP Billiton Limited Price, Consensus and EPS Surprise

 

BHP Billiton Limited Price, Consensus and EPS Surprise | BHP Billiton Limited Quote

Margin

Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $11.3 billion for first-half fiscal 2018, marking an increase of 14% year over year.

Balance Sheet

Cash and cash equivalents as of Dec 31, 2017, came in at $12.3 billion, up from $14.2 billion reported at the end fiscal 2017. Interest-bearing liabilities summed $25.7 billion, down from $29.2 billion as of Jun 30, 2017.

Cash Flow

In first-half fiscal 2018, the company generated $10.4 billion cash from operations, up 22.4% year over year. Capital and exploration expenditure totaled $2.9 billion, up from $2.7 billion incurred in the year-earlier period.

Outlook

BHP Billiton aims to boost its financial fundamentals in the near term on the back of improved mining and exploration activities, efficient operations, along with strategic capital deployment programs.

Our Take

Gradual recovery of iron-ore prices is likely to benefit major mining companies like BHP Billiton, Rio Tinto plc (RIO - Free Report) , Vale S.A. (VALE - Free Report) , and Cliffs Natural Resources Inc. (CLF - Free Report) . Over the last three months, price of this major steel-making component has been up nearly 23.2% to $77.15 per ton (as of Feb 22, 2017). The upside can be attributed to factors like the steel production-curtailing decision by China, inflation in steel prices as well as steel plants’ restocking demand hopes.

Moreover, the company is poised to grow on the back of elevated mining productivity, new investments and efficient operations. Nonetheless, headwinds such as stiff industry rivalry, sudden occurrence of environmental hazard or an oversupply situation in the mining market might act as near-term headwinds.

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