BHP reports strong Q2, copper shines amid coal weakness By Investing.com

Investing.com — BHP ( LON: ) reported strong second-quarter operating results, largely meeting analysts’ expectations. Although challenges remain, key components have performed well.

BHP’s iron ore output for the quarter came in at 66.3 million tonnes, in line with expectations.

The Western Australian operations produced 64.8 million tonnes, demonstrating the company’s strength in maintaining steady production.

For , quarterly production stood at 511,000 tons, an increase of 7% from the previous quarter, due to strong production in Escondida.

However, South Australia’s copper guidance was moderated earlier in the financial year due to power-related outages, which have since been resolved.

Metallurgical coal production reached 4.4 million tons, a slight 2% lower than forecast, while thermal coal production was 3.7 million tons, a modest 3% increase.

Additionally, while coal shipments came in higher than expected, realized thermal-coal prices underperformed, trailing BMO forecasts by 10%.

Analysts at BMO Capital Markets revised their full-year EBITDA forecast to $27.3 billion for FY2025, a slight upward revision.

However, recent investments, including the Philo acquisition and the completion of the Vicuna joint venture, could push the company’s net debt to the high end of its $5-15 billion target range, analysts said.

A dividend of $0.48 is expected in February, contributing to an annual yield of 4.3%.

BHP has experienced a mixed commodity price environment. WAIO iron ore prices averaged $81.1 a tonne, slightly ahead of forecasts, while thermal coal prices were lower.

Copper prices remain positive, helping to offset weak performance in coal. Analysts have highlighted the company’s strength in diversification, particularly its exposure to copper, which is mitigating inflation in other sectors.

BHP reaffirmed its production guidance with minor adjustments to reflect operational realities such as higher coal production targets.

BHP’s diversified portfolio, including high-quality assets, positions it well against its iron ore-focused peers.

However, there are challenges with volatile commodity prices and rising prices, especially in coal operations.