Digging Into What Drove BHP Billiton Limited (BHP)’s Earnings

The management team, which will soon be under new leadership, also has been known to focus on controlling costs. Those controllable costs have been reduced by $1.9 billion on an annualized basis as the company tightens its belt where it can. Without this focus, results would have been worse. Instead, the company is positioned to thrive in the years ahead.

What BHP can’t control in the near term are commodity prices which will always have the greatest impact to its profitability. The bottom line here is that BHP is doing what it can to prudently manage its business to deliver the highest possible results to investors over the long term. As a shareholder, I can’t complain with this course of action and I think BHP is doing a very solid job given the current operating environment.

The same can’t be said for Cliffs Natural Resources, which has grown from a domestic iron ore producer into an international player in both the iron ore and metallurgical coal markets. It has also underwhelmed investors lately, especially after its dramatic 76% dividend cut in February. However, it could now be looked at as a possible value play due to several factors that are likely to remain advantageous for Cliffs’ management.

The article Digging Into What Drove BHP Billiton’s Earnings originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of BHP Billiton Limited (ADR). The Motley Fool has no position in any of the stocks mentioned.

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