BHP said its bottom line was wrecked by plummeting oil and iron ore prices and the Samarco mine disaster.
However, chief executive Andrew Mackenzie yesterday pledged to continue cutting costs and reducing debt as part of an effort to emerge stronger from the downturn.
The company hopes to more than double free cash flow to $US7 billion in the year to June 2017.
The news seemed to have cheered investors, with shares in the company gaining 47 cents, or 2.3 per cent to $20.72, by 1050 on Wednesday AEST.
“BHP’s result contained no major surprises, with underlying earnings achieving a slight beat on consensus expectations. The period of major writedowns now looks to be behind for the company,” CMC Markets chief analyst Ric Spooner said today.
Analysts, on average, had expected the company to report of a $US7 billion net loss and underlying profit of around $US1 billion.
UBS analysts today raised their 12-month price target on BHP stock to $23 a share, from $22 earlier, saying the cash flow was stronger than forecast, and operational improvements were visible in the company’s second-half performance.
Global ratings agency Moody’s has also retained its ‘A3 negative’ credit rating for the company, saying the results were in line with expectations.
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