All eyes will be on Fortescue Metals Group Ltd (ASX: FMG) shares later this week.
That's because the iron ore giant will be releasing its highly anticipated half year results on 15 February.
Image source: Getty Images
What to expect from Fortescue's results
According to a note out of Goldman Sachs, its analysts are expecting Fortescue to report underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$4.5 billion for the six months.
This will be down slightly from US$4.8 billion a year earlier due largely to lower average iron ore prices.
Interestingly, despite Goldman Sachs being bearish on Fortescue shares, its earnings estimate is slightly ahead of the consensus estimate of US$4.4 billion.
On the very bottom line, Goldman expects a net profit after tax of US$2.5 billion for the first half. Once again, this is slightly ahead of the consensus estimate of US$2.4 billion.
But much like its EBITDA, this will be a decline from US$2.8 billion during the first half of FY 2022.
The Fortescue dividend
Another thing that is likely to be on the slide is the Fortescue dividend.
While Goldman expects Fortescue to maintain a 70% payout ratio for this half, the lower earnings will mean a fully franked interim dividend of 56 US cents (81 Australian cents) per share. This is down from 86 Australian cents per share last year.
The consensus estimate for the Fortescue dividend is 53 US cents per share, which equates to approximately 77 Australian cents per share.
What else should you look out for?
Outside the result, Goldman Sachs has suggested that investors look for commentary on its decarbonisation plans. It said:
Look for any further update on Pilbara decarb capex, Iron Bridge commissioning and Fortescue Future Industries (FFI) projects.
