Will These Iron Ore Stocks Rise After Their Earnings Releases? BHP Billiton Limited (ADR) (BHP) and More

FORTESCUE METAL GRP (PINK:FSUMF)

The Street forecasts FMG to report H1-13 EBITDA of US$909 million, down 40% y/y and down 33% h/h. The underlying earnings are forecasted to be US$340m, down 44% h/h. We do not anticipate FMG’s result to be a material catalyst as FMG has already effectively provided their revenue (through volume and realized prices) as well as costs in their quarterly production reports. In addition, production and CAPex guidance to 115Mtpa (Mt per annum) by the end of CY2013 has been well flagged.

Foolish Bottom-Line

This earnings season will be marked by declining NPAT YoY. This is perfectly exhibited by the earnings preview of these three companies. In the face of tempering commodity prices in 2013, it will not be wrong to say that earnings growth will become more leveraged to costs out. In these circumstances, experts expect the resources sector to focus heavily on OPex and CAPex to improve profitability and free cash flow.

The article Will These Iron Ore Stocks Rise After Their Earnings Releases? originally appeared on Fool.com and is written by Masam Abbas.

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