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Commodities & Metals

BHP Investors Braced For Earnings (BHP, RTP, AA)

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By Douglas A. McIntyre Updated Published

On Tuesday (actually late Monday night in the U.S.), we’ll get to see earnings out of BHP Billiton Ltd. (NYSE: BHP). The estimates from First Call for the metal and mining giant were not calculated in dollars as it is based in Australia and might as well just be considered its own country.

This has been one of the more complicated companies to cover because of the global waves of mergers in metals and mining, plus it has been a huge winner in the global growth trade.  The fact that all these metals and miners are getting so large could even lead one to believe they are forming an international cartel or syndicate that controls supply to keep prices high. 

If Friday’s closing prices are any indicator and if the earnings were coming out immediately, it appears that options traders would be pricing in a move of up to $2.40 to $3.10 in either direction.  The problem is that options in this one and other global metals and miners have a huge added premium to them because of mergers.   Goldman Sachs recently made some gold changes on its Conviction Buy List.

Alcoa (NYSE: AA) taking a stake in Rio Tinto plc (NYSE: RTP) is just one more wrench in the machine there. 
We already noted how China didn’t want a BHP-RTP merger.

BHP Billiton’s 52-week trading range is $40.34 to $87.43, so it is still well off of highs even after a big run up on Friday.  The Lord Giveth, and The Lord Taketh Away."  This one recently fell 10% too, and  saw a 9% rise on Friday.

Jon C. Ogg
February 3, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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