Mining giant BHP Billiton Limited (BHP Quick QuoteBHP - Free Report) reported weak financial results for fiscal 2016 (ended Jun 30, 2016). We believe that the existing market headwinds such as unfavorable pricing environment, stiff competition and appreciation of the U.S. dollar have weighed over the company’s results.

Earnings per American Depositary Share (“ADS”) from continuing operations came in at roughly 23 cents, down 81% from $1.21 per ADS earned a year ago.

Revenues: Revenues for fiscal 2016 totaled $30.9 billion, down 30.7% from $44.6 billion in the year-ago period. The decline stemmed from a significant fall in the market prices of the company’s major commodities.

Margin: Underlying earnings before interest, taxes, depreciation, and amortization (“EBITDA”) were $12.3 billion for fiscal 2016, down 44% year over year.

Balance Sheet: Cash and cash equivalents as of Jun 30, 2016 were $10.3 billion as against $6.8 billion as of Jun 30, 2015. Interest-bearing liabilities totaled $31.8 billion compared with $28 billion as of Jun 30, 2015.

Cash Flow: Net operating cash flow plummeted 44.9% year over year to $10.6 billion for fiscal 2016. Capital and exploration expenditure was $6.9 billion as against $11.9 billion incurred in the year-ago comparable period.

In the reported period, the company paid dividends worth $4.1 billion compared with $6.5 billion paid at the end of fiscal 2015.

Outlook: BHP Billiton aims to boost its financial fundamentals in the near term on the back of improved mining & exploration activities, efficient operations and strategic capital deployment programs.  

As of Aug 16, 2016 BHP Billiton closed the trading session at $31.50 per share. However, it remains to be seen how the stock performs after posting the lackluster fiscal 2016 results.

Stocks to Consider

BHP Billiton currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include McEwen Mining Inc. (MUX Quick QuoteMUX - Free Report) , Rio Tinto plc (RIO Quick QuoteRIO - Free Report) and Klondex Mines Ltd. . All the three companies currently hold a Zacks Rank #2 (Buy).

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