UPDATE 2-BHP misses on profit, dividend; focuses on paying down debt

(Recasts, adds company comment, details)

SYDNEY, Aug 22 (Reuters) - Global mining giant BHP Billiton posted a surge in annual underlying profit to $6.7 billion on Tuesday, but missed forecasts, and said it was putting its U.S. shale assets up for sale.

The world's biggest mining house, which was buoyed by a recovery in industrial commodities markets, pleased shareholders by cutting net debt by nearly $10 billion and tripled its final dividend to $0.43 a share, though still below expectations.

"Net debt looks very impressive.. so the cash looks like it was applied to deleveraging versus extra dividends," Shaw and Partners analyst Peter O'Connor said.

BHP, under pressure from some shareholders to sell its underperforming U.S. shale oil and gas business bought at the height of the oil boom, said it was "actively pursuing options to exit" the "non-core" business.

Chief Executive Andrew Mackenzie told an analysts' call the preference would be to sell the business through a small number of trade sales.

Fund managers including Elliott Management and Tribeca have been agitating for a sale or other form of divestment, along with higher shareholder returns and the elimination of dual-structured Australia and London stock listings.

Tribeca welcomed BHP's comments that the business was no longer core.

"That was our approach. We didn't see it fitting strategically in BHP. We think they can realize value ahead of market expectations for the U.S. onshore business," Tribeca analyst James Eginton said.

BHP Chairman Jac Nasser, who retires this year, recently conceded a $20 billion investment in shale six years ago was in hindsight a mistake. Analysts have suggested the business could sell for about half that today.


BHP benefited from a 32 percent rise in iron ore pricing in fiscal 2017, owing to greater demand from Chinese steelmakers, which buy the majority of the ore.

Prices for copper, oil, coal, nickel and other commodities were also up, with only liquefied natural gas weaker.

"Strong momentum will be carried into the 2018 financial year, with volume growth of 7 percent and further productivity gains expected," Mackenzie said.

He reiterated the company's commitment to its conventional petroleum business, saying the company sees opportunities to make a lot of money from conventional oil over at least the next couple of decades.

Underlying profit jumped from $1.2 billion a year ago, but was below analysts' forecasts for around $7.4 billion, based on Thomson Reuters I/B/E/S.

At the bottom line, the company swung to an attributable profit of $5.89 billion from its record loss of $6.39 billion a year ago.

In fiscal 2016, the bottom line was hit by $7.7 billion in write-downs, with Mackenzie vowing they would not be repeated in 2017.

BHP shares rose 1.5 percent in early trade to $25.93 in a overall market up around 0.3 percent. (Reporting by James Regan; Additional reporting by Sonali Paul; Editing by Richard Pullin)