Earnings Results: BHP Group Ltd and Cochlear Ltd

BHP Group Limited – BHP Results for the Year Ended 30 June

BHP (ASX: BHP) today reported results for FY20. BHP’s revenues fell by five percent to $42. Billion, while profits fell four percent to $7.9 billion. As a result, BHP will cut the final dividend to 55 US cents, from 78 for FY19. Despite the decline in results, earnings were perhaps only a slight miss on what was expected by analysts, although it was perhaps a slight miss.

BHP indicated that it would look to sell some of its coal operations. Should BHP divest some of these operations, it would likely provide a big cash boost similar to when it divested some of its US oil assets; some of the proceeds from that sale ended up in investors pockets by way of a special dividend.

Cochlear Limited – FY20 result

Cochlear (ASX: COH) today reported a 6 percent drop in revenues to $1.35 billion, while the company moved to a $238 million loss, down from a $276 million profit in FY19. There was a loss of $4 per share. The company will not pay a final dividend as a result.

The result was driven by a rapid drop in sales in the second half and as a result, the company will not provide guidance for FY21. The revenues reported are perhaps slightly better than expected, but the profits are a definite miss. Emerald Equities views Cochlear as unreasonably expensive, even before today’s result.

However, with its recent capital raise significantly oversubscribed, there’s still likely plenty of investors that are willing to pay current prices for Cochlear shares.

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