BHP Billiton (NYSE: BHP) reported a loss of roughly $1.07 per share for the first half of fiscal 2016, in the same period last year it earned $0.80 a share. Revenues, meanwhile, were roughly $15.2 billion, a nearly 37% decline from the previous year's $24.9 billion. As if that wasn't bad enough, the dividend was cut and BHP took a huge charge for the Samarco disaster. Bad news was in abundance.

Earnings were rough
As expected, BHP Billiton's top and bottom lines continue to feel the heat of the weak commodity market. In fact, prices were lower year over year for every single commodity the company produces. The biggest hit, not surprisingly, was on the oil side, where realized selling prices fell a massive 50% year over year. Iron ore and nickel prices both fell around 40% percent. The best performing commodity for BHP was thermal coal which "only" fell 20%.

BHP's realized prices -- it's all bad news. Source: BHP Billiton 

There's no way to sugarcoat this: BHP's business is in a deep downturn, and it's having the expected impact on the miner's results. And while BHP is cutting costs, trimming capital spending by 40% year over year in hopes of improving productivity, it just hasn't been enough to keep up with falling prices. In short, BHP is doing the right things, but it can only do so much.

Dividend gets cut
All of this helps explain why BHP chose the abandon its pledge to support a "progressive" dividend. It cut the dividend nearly 75% to just $0.16 a share. That's a steep decline, but it's no different from what other major industry players are doing.

For example, while Rio Tinto's (RIO 0.28%) 2015 dividend was flat year over year, the company announced that it would basically be cutting the payment by nearly 50% in 2016. The driving force for the cut at Rio was, just like BHP, top line weakness driven by a weak commodity market and a swing to red ink on the bottom line. Many peers have simply eliminated their dividends, so it could have been worse at both BHP and Rio.

For income investors who had hoped the dividend would hold, BHP's dividend cut decision is clearly a blow. But, for the company, conserving capital is the right choice. The new dividend policy is to provide "a minimum 50% payout of Underlying attributable profit at every reporting period." That means a variable dividend, but one that should be more sustainable over the long term.

The Samarco bills start
The next big issue for BHP was the impact of the Samarco disaster. This is the Brazilian mine the company owns 50/50 with Vale (VALE 2.07%). In short, mine waste broke through a containment dam, causing the loss of life and significant damage to surrounding areas.

BHP Billiton logo. Source: BHP Billiton.

BHP took a $1.2 billion before tax charge (roughly $850 million after tax) because of the event. However, that's not the end of the impact. First, the Samarco mine is currently idled and, thus, it's not producing any iron ore. That will hit the top and bottom lines. More important, however, the Brazilian government is currently in discussions with Vale and BHP over the creation of a more than $5 billion kitty to fund clean up efforts. In other words, this far from over.

Nothing good, but at least we know
There wasn't much good news to latch onto in BHP's fiscal first half results. However, the ugly numbers have pretty much been baked into the stock's price, and the dividend cut ends the uncertaintly on that front. So, don't be surprised if there's a price bump following the news that it really was as bad as expected. That, however, won't change the fact that BHP is still struggling to deal with a difficult commodity market and a huge unknown with regard to its Samarco costs.