A busy week for the big four
This week, I thought I'd follow up on my last article to see how the big four companies - BHP, Rio Tinto, Telstra and Newcrest - fared when they reported to the market last week.
Starting with the major resource companies, BHP reported on Wednesday, announcing a US$9.9 billion ($A9.27 billion) half-year profit, or $US1.65 billion per month.
BHP announced a fully franked interim dividend of US55c/share, with the stock going ex-dividend on February 27.
The report was broadly in line with market expectations, with the iron ore and petroleum divisions earning the bulk of the profits for the company. Production disruptions (coal and copper divisions) and lower base metal prices negatively impacted the result. All in all, it was a solid result with no major surprises.
Rio Tinto followed up with its result on Thursday, with net profit slumping heavily on the back of impairment charges relating to its Alcan aluminium business, despite underlying earnings beating analysts expectations.
It continues to show that Rio Tinto's purchase of Alcan at the peak of the market was a horrific mistake.
In an ironic twist that is five years too late, the men who oversaw the Alcan acquisition, Tom Albanese and Guy Elliot, have notified Rio's remuneration committee that they do not wish to be considered for an annual bonus on the back of the poor Alcan result. Maybe chivalry in business is not dead.
Rio will pay a fully franked interim dividend of 84.2c/share, with the stock going ex-dividend on February 29.
The Telstra profit result of $1.47 billion for the last six months was below market consensus but the good news come in the confirmation that the company would retain its 28c/share fully franked dividend for the next three to four years.
This keeps Telstra in the top bracket of high-yielding stocks and in our view remains a core holding in any blue chip portfolio.
The good news for Telstra came from its mobile division, as customers continued to flock to the telecommunications provider.
However, the Sensis division, which includes the White Pages and Yellow Pages telephone directories, continues to flounder.
Telstra goes ex-dividend for 14c/share fully franked dividend on February 20.
Newcrest Mining presented the most interesting report of the four, smashing analysts' expectations by posting a net profit of $659 million for the previous six months.
The company also increased its dividend from 10c to 12c/share.
The good news is that Newcrest has maintained production guidance for the coming year, while the interesting twist was that the company was set to seek dual listing on the Toronto Stock Exchange (TSX) by the end of March.
Newcrest is not seeking to raise capital with this listing, rather it will build its profile in the North American markets and open up new capital markets.
The company noted that several of its largest competitors, such as Newmont, are North American, so a TSX listing would make comparisons between the companies easier for investors.
_Information contained in this article does not consider your personal circumstances. You should consult a stockbroking professional before making any investment decisions. Sentinel may hold positions in stocks discussed from time to time. _
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