In Week 3 of reporting season, we can expect coronavirus (excuse me, COVID-19) to be much more prominent. This is because we will hear outlook statements from some of the companies most exposed to a China slowdown. To say that the market will be listening closely is an understatement.
On Tuesday (after the market closes), we will see half-year numbers from BHP. In terms of earnings, the market is expecting about US$5 billion–US$5.5 billion ($7.5 billion–$8.2 billion), with underlying earnings (EBITDA) of about US$12.5 billion ($18.7 billion). The iron ore operations should contribute about 60% of that EBITDA figure.
Last year, BHP reported a half-year profit of US$4 billion ($5.7 billion), with an interim fully franked dividend of 55 US cents (77.2 cents). Some brokers (notably Macquarie) think BHP’s interim dividend payment could surprise on the upside – and there is even a possibly of the mining giant returning additional capital to shareholders through a special dividend.