BHP share price on watch following third-quarter update

BHP has handed in its report card for the three months to 31 March.

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Key points

  • BHP has released its third-quarter update for FY 2023
  • The mining giant appears to have delivered a result a little short of expectations
  • The company's guidance remains largely unchanged, though

The BHP Group Ltd (ASX: BHP) share price will be one to watch on Friday.

That's because the mining giant has just released its third-quarter update.

BHP share price on watch following soft quarter

For the three months ended 31 March, BHP reported the following production:

  • Copper production of 405.9kt
  • Iron ore production of 59.8Mt
  • Metallurgical coal production of 6.9Mt
  • Energy coal production of 3.9Mt
  • Nickel production of 19.6kt

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting quarterly copper production of 435kt, iron ore shipments of 64.7Mt, met coal production of 7Mt, and nickel production of 21.1Mt.

Whereas the consensus estimate was for 432kt, 67.9Mt, 7.4Mt, and 21.7Mt, respectively.

This means BHP has fallen short of what both Goldman and the market were expecting from the Big Australian. This may not bode well for the BHP share price on Friday.

FY 2023 guidance

However, potentially giving the BHP share price some support today was its full-year guidance, which is largely unchanged for both production and costs.

BHP revealed that its production guidance for the 2023 financial year remains unchanged for iron ore, metallurgical coal, and energy coal. Pleasingly, Olympic Dam and Pampa Norte are expected to be toward the upper end of their guidance ranges. Though, BHP Mitsubishi Alliance (BMA) is expected to be at the bottom of its range.

Over at Escondida, its production guidance has been lowered to between 1,050 and 1,080 kt (from between 1,080 and 1,180 kt). However, given the strong performance at the other copper assets, full year total copper production guidance remains unchanged at between 1,635 and 1,825 kt. One slight negative, though, is that full year nickel production has been lowered to between 75 and 85 kt (from between 80 and 90 kt).

As for costs, BHP's full-year unit cost guidance remains unchanged. Though, Escondida and WAIO are expected to be at the top of their respective ranges.

BHP's CEO, Mike Henry, spoke positively about demand. He commented:

Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China's economic rebound and solid momentum in India's steelmaking growth helping to offset the impact of slowing growth in the US, Japan and Europe

Finally, the Big Australian revealed that it has identified a new copper porphyry mineralised system, Ocelot, in the Miami-Globe copper district in Arizona, United States.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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