Fortescue Metals Group Ltd (ASX: FMG) shares are taking a hit today.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $20.00. In morning trade of Wednesday, shares are swapping hands for $19.41 apiece, down 3.0%.
For some context, the ASX 200 is down 0.2% at this same time.
This follows the release of Fortescue's full-year financial results (FY 2025).
Here's what investors are mulling over today.
Image source: Getty Images
Fortescue shares slide on falling earnings
Investors are bidding down Fortescue shares despite the miner reporting record iron ore shipments over the 12 months of 198.4 million tonnes (Mt).
And the miner's Hematite (an iron oxide mineral) C1 costs declined 1% year on year to US$17.99 per wet metric tonne (wmt).
Despite the record shipments, FY 2025 revenue was down 15% on FY 2024 to US$15.5 billion. The decline was driven by an 18% decrease in Fortescue's Hematite average revenue to US$85 per dry metric tonne (dmt).
Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$7.9 billion were down 26% year on year. And the miner's underlying EBITDA margin of 51% was down from 59%.
On the bottom line, net profit after tax (NPAT) of US$3.4 billion declined by a sharp 41% from FY 2024.
As for that passive income, the board declared a fully franked final dividend of 60 Aussie cents per share, down 32.6% from last year's final Fortescue dividend. This brings total dividends declared for FY 2025 to $1.10 per share, representing a 65% payout of NPAT.
If you want to bank the final dividend payout, you'll need to own the stock on 29 September. Fortescue shares trade ex-dividend on 1 September. You can then expect to be paid on 26 September.
In other core financials, Fortescue's FY 2025 total capital expenditure and investments came out to US$3.9 billion.
Turing to the balance sheet, as at 30 June, the ASX 200 miner had a cash balance of US$4.3 billion and gross debt of US$5.4 billion, resulting in net debt of US$1.1 billion.
What did management say?
Commenting on the results pressuring Fortescue shares today, CEO Dino Otranto said, "As the industry's lowest-cost producer, we've delivered another strong set of results – record shipments, disciplined cost performance, solid earnings and a continued focus on safety."
Otranto added:
The Australian Prime Minister's recent visit to China, which I was honoured to join, highlighted the value of collaboration between governments and industry. It was a strong signal for strengthening relationships in key markets.
What's next for Fortescue shares?
Looking at what could impact Fortescue shares in the year ahead, the ASX 200 miner provided FY 2026 guidance for iron ore shipments of 195 million tonnes to 205 million tonnes.
C1 costs for Hematite are forecast to be in the range of US$17.50 to US$18.50 per wet metric tonne.
And Fortescue expects metals capital expenditure to be in the range of US$3.3 billion to US$4.0 billion, while energy capex is forecast to be around US$300 million.
With today's intraday slide factored in, Fortescue shares remain up 6% since this time last year, not including those welcome dividends.
