From Goldies today:
While all of the companies remained focused on maximizing volume and delivering productivity gains during the half, we expect that both earnings and cash flows will have been squeezed by the deteriorating price environment (most notably in iron ore). Although significant progress hasbeen made on balance sheet repair, we believe it is still too early to expect capital management, with ordinary dividend s likely to remain the primary tool for increasing shareholder returns.
BHP Billiton (BHP.AX, Buy)
+ve surprise potential: iron ore; met coal; capital management
-ve surprise potential: dividend flat; petroleum costs; writedowns
We consolidate the announced writedowns; FY14 EPS -5.3% to US$2.56ps.
Rio Tinto (RIO.AX, Neutral)
+ve surprise potential: copper; increased dividend; overall cost reductions
-ve surprise potential: dividend flat; coal; writedowns
Fortescue Metals Group (FMG.AX, Sell)
+ve surprise potential: dividend increase, cost outlook
-ve surprise potential: source and sustainability of recent cashflow
Atlas Iron (AGO.AX, Neutral)
+ve surprise potential: production outlook; cost reductions
-ve surprise potential: 2H14 loss; capex outlook; rail access negotiations.
Mount Gibson Iron (MGX.AX, Sell)
+ve surprise potential: pricing outlook; overall cost reduction
-ve surprise potential: production outlook; Shine economics
