Bhp Hit By Weak Copper Price In Q1

The steel, petroleum and copper giant reported a net profit of A$287 million ($227 million) for the three months to August 31, down from A$372 million a year earlier, but within market expectations.

Analysts have been trimming back their BHP earnings estimates due to weaker copper prices and a flat steel market.

BHP results were largely hit by copper, a metal in which BHP invested heavily earlier this year before copper prices plummeted on the Sumitomo copper trading scandal in May.

BHP became the world's second largest copper producer when it bought the US-based Magma Copper for US$2.4 billion in January.

 

BHP's copper division reported a 56 per cent fall in net profit to A$85 million for the first quarter, despite increased copper sales. BHP's total sales rose a marginal 2.7 per cent to A$4.84 billion in the quarter. Sales growth was constrained by a stronger Australian dollar, which rose to an average 79 US cents from 73 US cents a year earlier.

BHP has said a one cent increase in the Australian dollar cuts A$40 million from its bottom line profit. Australia's BHP hit by weak copper price in Q1

Of the four key divisions