Pilbara Minerals shares could drop 12% on upcoming results if history repeats itself

Pilbara investors might be nervous heading into this earnings season.

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This Thursday, lovers of ASX lithium shares might be glued to their computer screens to get a good look at the latest results from Pilbara Minerals Ltd (ASX: PLS).

The ASX's largest lithium share is scheduled to report its latest earnings this Thursday, 22 February. And investors will no doubt be watching the Pilbara share price in the hopes that history won't repeat itself.

Pilbara's recent history when it comes to reporting earnings has indeed been a pleasant one.

Last August, the company gave investors a look at its full-year results for the 2023 financial year. As we covered at the time, these saw Pilbara report a 242% rise in revenues to $4.05 billion. That was alongside a 329% increase in underlying profits before tax to $2.27 billion.

These figures were possible thanks to PIlbara's 607.5 kilotonnes of spodumene concentrate sales, which averaged a price of US$4,447 per tonne (up 87% at the time).

This set of results allowed Pilbara to pay out only its second-ever dividend payment to shareholders. That was a final dividend worth 14 cents per share. This payment complimented March's interim (and inaugural)  dividend of 11 cents per share. Together, these payouts give Pilbara shares the 6.91% dividend yield the company trades on today.

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the Pilbara Minerals share price continue to fall

Image source: Getty Images

Will Pilbara shares repeat last year's success?

Memories of this earnings report are doubtless still fresh in the minds of Pilbara investors. Despite the seemingly positive numbers listed above, the days following these earnings saw the Pilbara share price sink by almost 12%.

However, even the most misty-eyed optimists are probably not expecting a repeat performance of August's earnings numbers this week.

Thanks to plummeting lithium prices, Pilbara will face a steep uphill climb to produce anything close to August's figures.

Last week, my Fool colleague James went through ASX broker Goldman Sachs' estimations of what Pilbara will report this week. And it certainly isn't forecasting a case of history repeating itself.

Goldman's analysts are expecting Pilbara to reveal revenues of $774 million for the half-year. That would be down 64% on what Pilbara reported for the first half of FY2023. The broker is also pencilling in net profits of just $324 million, down 74% on last year's numbers.

Disappointingly for income investors, Goldman is also estimating that there will be no dividend at all this time around from the lithium stock.

As my colleague also discussed, Goldman's numbers are significantly more pessimistic than the broader market consensus.

No doubt shareholders are hoping Goldman has missed the mark this time. If they have, and Pilbara surprises to the upside, shareholders may dodge another 12% sell-off. But we'll have to wait and see exactly what Pilbara pulls out of its hat on Thursday to know if this optimism will be rewarded.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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