BHP Billiton (ASX: BHP) to Report Second Half Results Today
Aug 18th, 2008 | By Dan Denning | Category: Financial News, Gold MarketMelbourne-based resource giant BHP Billiton (ASX: BHP) is scheduled to report its second half results today. Analysts expect the company to report a 30% gain in second half profit to $9.4 billion. That profit growth was driven mainly by higher prices in the petroleum division and production increases in iron ore.
Yet the stock is down 4%, year to date. And commodities are coming off a horrible month in which they lost nearly 10%. This doesn’t seem to have deterred Marius Kloppers at BHP. He’s hitched the company’s wagon to China’s growth and plans on spending $85 billion to expand production. He is going on the offensive, which is not something you do if you think the war is clearly over and that you’ve lost.
So what does the BHP Billiton result tell us? It tells us that iron ore and coal are the most firmly entrenched of the commodities in the resource market. They will be hard to dislodge and appear to give investors a kind of refuge amongst the greater gloom. While base metals and energy have suffered severe setbacks and the hands of liquidating speculators, coal and iron ore producers should (and we repeat should because these things can change) continue to ride high export prices to profits.
One thing to watch for? A slowdown in Chinese steel production. It doesn’t matter why it would happen. But if it does happen, the coal and ore stocks could suffer casualties.
Dan Denning
The Daily Reckoning Australia
Source: BHP Billiton (ASX: BHP) to Report Second Half Results Today
Advertisement
$592 Trillion Phantom Economy Blows as Latest Demon Derivative Unwinds
The worst demon derivative to date is about to whip down Wall Street...leveling what little is left! Over 700 banks (with trillions of dollars in assets) will come crashing to the ground. Hundreds of hedge funds will collapse. Corporate bankruptcies will soar. And another $20 trillion will be wiped off global stock markets. But this one bombed out investment will soar two to ten fold as the world comes undone.
Find out the entire story from the investment group who eerily predicted the current crisis "to a T!"...
Click here now and find out how to get started...
Dan Denning is a contributing editor to Diggers & Drillers and a regular columnist for Money Weekly, a Taiwanese financial publication. From 2000 to 2006, Dan was the editor of Strategic Investment of Agora Publishing. His reporting and analysis for The Daily Reckoning is read by more than 500,000 people regularly.