BHP shares would cruise to record highs during February reporting season.
The post How did the BHP (ASX:BHP) share price perform last reporting season? appeared first on The Motley Fool Australia. –
The BHP Group Ltd (ASX: BHP) share price closed at $52.81 on Friday, within an arm’s reach of its recent all-time high of $54.55.
Shares in the iron ore major have managed to stand tall despite the recent free-fall in iron ore spot prices.
The iron ore price was above ~US$210/tonne by the end of July but steel production mandates from China would see it plunge to ~US$167/tonne.
Weaker iron ore prices could be a cause for concern for BHP investors but, before we try to peer into the future, it might be worth looking back at how the BHP share price performed during its last earnings results.
How did the BHP share price perform during February reporting season?
The BHP share price was making plenty of headway during the February reporting season.
Iron ore prices had just rallied to 10-year highs of ~US$170/tonne and BHP’s half-year results were expected to take advantage of sky-high commodity prices.
The BHP share price would rally 2.73% to $47.00 on the day of its half-year results on 16 February.
The results delivered a 21% increase in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) to US$14.7 billion, alongside a 16% increase in attributable profit to US$6 billion.
The strong uplift in earnings would see dividends jump 55% to US$1.01 per share.
Not only would the BHP share price rally on the day of its earnings announcement but push to an all-time high of $50.87 by 3 March.
Within the earnings presentation, BHP would highlight that a US$1/tonne movement in iron ore prices would drive a US$236 million impact on FY21’s underlying EBITDA.
Fortunately for BHP, iron ore prices would rally from ~US$170/tonne in February to record highs of ~US$230/tonne by May.
What about this reporting season?
BHP’s FY21 results are expected to land tomorrow — Tuesday, 17 August.
Rio Tinto revealed a 71% jump in sales revenue to US$33,083 million and a 156% surge in underlying earnings to US$12.2 billion.
This would translate to a 143% increase in interim dividends to $3.76 per share, alongside a fully franked special dividend of US$1.85 per share.
While it might be cash galore for iron ore miners, analysts have also flagged potential risks going into earnings season and ex-dividend.
This could be something to consider about the BHP share price in the lead up to its results.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.