Rio Tinto Ltd (ASX: RIO) shares will be worth watching closely next week.
That's because on 22 February, the mining giant will be releasing its full year results.
Ahead of the release, let's take a look to see what the market is expecting from the miner.
Rio Tinto full year results expectations
According to a note out of Goldman Sachs, its analysts are expecting Rio Tinto to report an operating profit a touch ahead of consensus estimates.
Its analysts are forecasting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$26.8 billion versus the consensus estimate of US$26.7 billion. This is expected to be underpinned by better than expected copper and minerals revenue, offset by weaker than consensus aluminium EBITDA due to higher costs.
However, this will be down almost 29% from FY 2022's underlying EBITDA of US$37.7 billion due partly to lower average iron ore prices.
On the bottom line, Goldman Sachs expects a net profit after tax of US$12.9 billion, compared to the consensus estimate of US$13.7 billion. The broker highlights that its lower than consensus estimate reflects higher than expected depreciation and amortisation, rehab costs, and tax.
As you might expect with Rio Tinto's lower earnings, a dividend cut is being forecast by the broker and the market.
Goldman has pencilled in a fully franked full year dividend of US$4.64 per share and the market is expecting a US$4.92 per share dividend. This is down from US$7.93 per share in FY 2021.
Despite this cut, based on where Rio Tinto shares are currently trading, Goldman's dividend estimate equates to an attractive 5.5% yield.
What else should you look out for?
Goldman also believes investors should look out for commentary on its decarbonisation program and lithium plans. It commented:
The Dec 22 investor day provided an update on the ~US$8bn decarbonisation program set out in 2021, and a medium term turnaround pathway for the Pilbara. We will look for further updates on key growth projects; Gudai-darri iron ore, Oyu Tolgoi copper/gold, Simandou iron ore JV, Jadar & Rincon lithium and Resolution copper along with progress on the decarbonisation plans capex.
