What's going on with BHP shares on Wednesday?

Investors haven't responded overly positively to the miner's quarterly update.

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BHP Group Ltd (ASX: BHP) shares are having a reasonably subdued session.

In morning trade, the mining giant's shares are down slightly to $45.52.

What's going on with BHP's shares?

Investors have given a lukewarm response to the release of the Big Australian's first-quarter update on Wednesday.

In case you missed it, BHP reported declines in production across the board compared to the fourth quarter of FY 2023.

Copper production was down 4% to 457kt, iron ore production fell 3% to 63.2Mt, met coal production dropped 34% to 5.6Mt, energy coal production was 24% lower at 3.6Mt, and nickel production tumbled 8% to 20.2kt.

While this may not look great on paper, it was largely in line with expectations and in some cases ahead of them.

Guidance reaffirmed

Also failing to give BHP's shares a boost was the reiteration of its production and cost guidance for FY 2024.

This includes copper production of 1,720kt to 1,910 kt (with Escondida uni costs of US$1.40 to US$1.70 per pound) and iron ore production of 254Mt to 264.5Mt (with WAIO unit costs of US$17.40 to US$18.90 per tonne).

Management also provided the market with guidance for FY 2025 and FY 2026 for Escondida, Spence (copper), and WAIO.

For Econdida, it is guiding to copper production of 1,200kt to 1,300kt with unit costs of US$1.30 to US$1.60 per pound. Whereas for Spence it expects production of 250kt. Finally, for WAIO, BHP is targeting production of >305Mt with a unit cost of US$17 per tonne.

Why are its shares underperforming?

Overall, it seems that everything was largely as expected with this update and already priced in following yesterday's solid gain.

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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