Any investor looking for a monthly payout should seriously consider investing in the BetaShares Dividend Harvester Active ETF (ASX: HVST) for passive income.

I’ve written before about how the Metrics Master Income Trust (ASX: MXT) is a strong monthly-paying stock. And even the Plato Income Maximiser Ltd (ASX: PL8) and its regular payments are an ASX investor’s dream. But I think HVST is a better buy for passive income. Here’s why.

Why HVST shares are a great option for passive income

HVST is an ASX-listed exchange-traded fund (ETF) that gives its investors exposure to a portfolio of 40 to 60 dividend-paying shares. The fund is constructed in a way that allows it to own a dividend share until it trades ex-dividend. At this point, the fund sells the shares and reinvests the proceeds into its next passive income-generating shares.

Its portfolio is rebalanced roughly every three months. And it targets shares that are expected to pay dividends within the next rebalance period. To improve its diversification, HVST also has exposure to the broader sharemarket exposures through an ETF. The process is referred to as ‘dividend harvesting’.

The fund’s share portfolio is typically drawn from the 100 largest ASX-listed companies and selected based on forecasts of high dividends and franking credits, based on their expected future gross dividend payments.

HVST’s portfolio allocation is weighted towards the financial sector (24.2%), with materials accounting for another 10.7%.

The fund’s top 10 holdings include Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), and CSL Ltd (ASX: CSL).

How much passive income does HVST pay to its investors?

HVST provides a regular, franked dividend income that is around double the annual income yield of the broader ASX. As of the 31st of December, its 12-month gross distribution (dividend) yield is 7.4%, and the net yield is 5.8%. The franking level is 66%. The fund’s annual management fee and costs are 0.72%.

HVST has a long history of paying consistent monthly dividends to its investors. The fund paid out $0.060929 per share to investors earlier this week. Prior to this, it paid $0.0652 per share per month from August to December, up from $0.0648 paid out throughout the first half of 2025. This equates to an annual running total of $0.775729 per share fully franked.

At the time of writing on Thursday morning, HVST shares are up 0.75% to $13.51 a piece. For the year to date, the shares have climbed 0.15%.

The post Passive income investors: This ASX stock has a 7.4% dividend yield with monthly payouts appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Wesfarmers. The Motley Fool Australia has recommended BHP Group, CSL, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Pantoro Gold Ltd (ASX: PNR) share price is under pressure today after the company released its December 2025 quarterly report.

The Pantoro share price is down 10% to $5.22 in early afternoon trade, despite the gold producer delivering another strong operational quarter.

Zooming out, Pantoro shares are still up more than 200% over the past 12 months. That rally has been driven by a higher gold price and a sharp turnaround in operational performance.

So, what did Pantoro report?

Another strong quarter on paper

Pantoro produced 22,071 ounces of gold during the December quarter, broadly in line with recent run rates. Gold sales totalled 22,473 ounces at an average realised price of $6,077 per ounce, reflecting the strength in the local gold price.

Importantly, costs remained under control. All-in sustaining costs (AISC) came in at $2,571 per ounce, helping Pantoro generate EBITDA of $83.6 million for the quarter.

Cash generation was equally impressive. The company reported operating cash flow of $39.2 million. As a result, Pantoro’s cash and gold balance increased by $35 million to $216.5 million at 31 December.

Operations continue to improve

The Scotia underground mine produced 7,869 ounces at an average grade of 3 grams per tonne. Development is moving into higher grade northern zones, which Pantoro expects to become a key source of ore in the coming months.

At the OK underground mine, production reached 7,081 ounces at a stronger grade of 4.31 grams per tonne. Open pit mining at Princess Royal and Gladstone also continued, with first ore from Gladstone expected by the end of the March quarter.

Drilling results were encouraging, particularly at Mainfield and Crown South Reef, supporting Pantoro’s longer-term growth plans.

Why are Pantoro shares falling then?

Despite the solid numbers, Pantoro flagged that FY 2026 production is now expected to come in at the lower end of its 100,000 to 110,000 ounce guidance range.

After a huge share price run over the past year, that softer outlook may have been enough to trigger profit taking. With gold stocks having rallied hard, the market appears to be demanding continued upside surprises.

Foolish Takeaway

Pantoro’s quarterly report highlights strong cash flow, a robust balance sheet, and ongoing operational and asset base improvements.

While the share price reaction looks negative today, the underlying business remains well-positioned if gold prices stay supportive. Investors will be watching whether Pantoro can convert its strong cash generation into consistent production growth.

The post Pantoro shares plunge 10% today. What just happened? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

Ahead of reporting season, the team at Jarden has run the ruler over the aviation sector and come to the conclusion that both Qantas Airways Ltd (ASX: QAN) and Virgin Australia Holdings Ltd (ASX: VGN) are good buys at current levels.

Looking at Qantas first, the Jarden team notes that the share price has underperformed the S&P/ASX 200 Index (ASX: XJO) since reporting its FY25 result, “following concerns around the earnings outlook from weaker demand and higher oil prices”.

A win-win in “rational” sector

But the Jarden team says that according to their analysis, the Australian aviation sector “remains in the best competitive rationality setting” for the past 20 years or so.

With this in mind, we think any near-term demand weakness can have its impact on operating earnings moderated by capacity rationality (lower growth) and yield management (improved pricing). We see the 1H26 result as a key catalyst for the Qantas share price to outperform near term. As a result, we reiterate our Buy rating and maintain our 12-month $12.70 target price.

Jarden is expecting a dividend yield of 3.1% from Qantas, and if its price target is achieved, this would represent a 24.2% return for investors.

The Jarden team said Qantas had so far only modestly changed its capacity settings, reducing them by about 1%, to reflect a changing demand environment, “and focus, we think, on load factor and yield preservation”.

From here, we see the revenue available per seat kilometre outlook as potentially more driven by ticket price movements than by load factor changes. Importantly, this could also provide additional support for earnings through 2H26E, should the fuel cost environment overall prove better than feared.

The Jarden team also noted that jet fuel prices have fallen about 47% since November.

Looking into 2H26, we see scope for adjustments to fuel price expectations, which could provide near-term upward support for earnings estimates for Qantas, all else remaining equal.

Qantas is expected to report its first-half results on February 26.

The company was worth $15.87 billion at the close of trade on Wednesday.

Virgin also cheap at current levels

Jarden also has a bullish price target on shares in Virgin, with a target price of $4, compared with $3.29 currently.

Virgin is set to deliver its first interim result since being relisted on the ASX, with that to happen on February 27.

Jarden said they believed it was too early for the company to start paying dividends, but nonetheless, they expected a solid result.

We see the fundamentals as remaining strong for Virgin Australia in the near term and maintain our Overweight rating and lift our 12-month target price from $3.90 to $4.00 following changes in the Virgin share price impacting its capital structure.

The post Which airline could deliver almost 25% returns? See what the analysts say appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.

Reporting season is just around the corner, and as we head into it, the team at RBC Capital Markets has made its call on the companies among the small-cap industrials they predict will outperform.

RBC actually has an outperform rating on 15 companies in this sector; however, today we’ll focus on their two top picks, Life 360 Inc (ASX: 360) and Temple & Webster Group Ltd (ASX: TPW).

Shares out of favour

Life 360 shares have been on a steep slide since early October, when they traded for more than $55, compared with just $26.03 currently.

This was despite a third-quarter result in which RBC said they “beat expectations for all financial metrics”, with revenue coming in 3.8% above consensus, gross profit 2.3% above consensus, and EBITDA 30.5% above consensus.

RBC said there were areas of weakness, though.

The result disappointed expectations for monthly active user net adds (-39.5% vs consensus) and Paying Circle net adds (-6.9%). Management attributed the softer operational performance to: i) a marketing pivot to customers with a higher propensity to convert to paid and ii) a potential pull-forward of demand following a successful 2Q25 ad campaign.

RBC said monthly active user numbers will be a key focus for the fourth-quarter results, as will the performance of Nativo, which Life 360 recently acquired, and the new pet tracking device division.

RBC has a price target of $49 on Life 360 shares, which would be an 87.9% uplift from current levels.

Life 360 is scheduled to release its full-year results to the market on March 3.

Worst is over for this furniture retailer?

On to Temple & Webster, and RBC noted the company’s November trading update, which showed total sales growth of 18% – a “considerable deceleration” from the August update – and which led to a sharp sell-off in Temple & Webster shares.

RBC said:

Despite the weaker than expected update management commentary noted the business was ‘on track’ to meet its $1 billion medium term (FY26-FY28) sales target and reiterated guidance for FY26 EBITDA margins in the range of 3% – 5%.

RBC said investor expectations were “rebased” after the November update, and there were some positive signs from the sector generally.

Industry feedback and data points since then have suggested online retailers have outperformed during the key Black Friday/Cyber Monday and pre-Christmas selling periods, we believe Temple & Webster could be a beneficiary of this dynamic.

RBC has a $19 price target on Temple & Webster shares, representing a 47.3% gain if achieved.

The post Looking for double-digit returns? Check out RBC Capital Markets’ picks ahead of reporting season appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 300 Index (ASX: XKO) mining stock Chalice Mining Ltd (ASX: CHN) has been on a tear this past year.

At the time of writing on Thursday, shares are down 3.4% in intraday trade, changing hands for $2.54 apiece.

Despite that retrace, Chalice Mining shares remain up a whopping 108.2% over 12 months, smashing the 5.5% one-year returns delivered by the ASX 300.

And with its flagship critical minerals project nearing potential production, Chalice Mining shares could keep outpacing the benchmark in the year ahead.

ASX 300 mining stock tipped for more gains

UBS analyst Levi Spry sees more upside potential for Chalice Mining, increasing the stock from a neutral to a buy rating (courtesy of The Bull).

Part of that bullish outlook stems from the ASX 300 mining stock’s Gonneville Platinum Group Metal-Nickel-Copper Project, located in Western Australia. The project was discovered by Chalice’s geologists in early 2020.

Chalice Mining notes:

In December 2025, the Pre-Feasibility was completed determining the optimal development pathway for the Project. A long life and globally critical minerals mine in Western Australia, set to generate A$4.7bn in free cashflow pre-tax, with a rapid payback of ~2.7 years.

Amid growing confidence that the project will advance to production, UBS increased its price target on Chalice Mining to $2.75 a share. That represents a potential upside of just over 8% from current levels.

What’s been happening with Chalice Mining?

Chalice Mining shares closed up 22.9% on 17 February last year after the ASX 300 mining stock reported a “major metallurgical breakthrough” at Gonneville.

The company said the breakthrough means the project will not require a hydrometallurgical process for the nickel concentrate, noting this “substantially reduces” technical risk, process complexity, and capital and operating costs.

Commenting on the advancement on the day, Chalice Mining CEO Alex Dorsch said:

The ability to produce a saleable nickel concentrate across the grade spectrum of the entire Gonneville Resource is a major breakthrough and fundamentally simplifies the world-class Gonneville Project. This is the step change we have been hoping for over the last two years.

Dorsch added:

Removing the need for a hydrometallurgical process materially reduces both the capital and operating costs and, together with the optimisations being introduced to the flowsheet, is expected to deliver a significant improvement in project margins across all high-grade and low-grade phases of a bulk open-pit mine plan. The simplified flowsheet also has much lower risk profile and gives the Project a smoother and more rapid pathway to development.

On 20 October, Chalice Mining affirmed that it has targeted the Final Investment Decision (FID) for its Gonneville Project in late calendar year 2027.

The post Up 108% in a year, why this buy-rated ASX 300 mining stock is tipped for more outperformance appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.

Many Aussie investors would benefit by having some ASX-listed exchange-traded funds (ETFs) in a portfolio, in my view. The most popular ones can provide investors with excellent diversification.

But, it’s possible for some portfolios to provide almost too much diversification, meaning the returns may not be as good as they could be if investors just owned the better businesses.

I like the idea of investing in some of the best portfolios because of the potential for stronger returns, which is why I like the following ideas for five-year (or longer) investments.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The global share market is home to a large array of wonderful businesses. The QLTY ETF aims to just pick out the best of them by owning 150 high-quality international stocks.

It identifies which businesses to own with a number of screens. That includes return on equity (ROE), debt to capital, cash flow generation ability, and earnings stability.

The ROE criteria mean the businesses earn a higher level of profit compared to the amount of shareholder money retained. Generating strong cash flow is very attractive because we want to see earnings flow through the bank account. Earnings stability suggests profit doesn’t usually go backwards, and the profit regularly rises. Low debt to capital ensures the businesses are healthy and not funding growth with a lot of debt.

This selection process has led to the businesses coming from a variety of countries and sectors. There are five industries with a double-digit weighting: IT (31% of the portfolio), industrials (16.6%), healthcare (16.3%), financials (10.6%), and consumer discretionary (10.4%).

Impressively, in the last three years, it has returned an average of 20.7%. But, past performance is not a guarantee of future performance.

Global X S&P World ex Australia GARP ETF (ASX: GARP)

The GARP investment strategy means ‘growth at a reasonable price’, which I think is one of the best ways to invest. Earnings growth is key for sending share prices higher. Buying at a good valuation is useful for identifying businesses that could outperform the market.

There are multiple elements that go into choosing the stocks for this portfolio.

It looks for growth, with 3-year sales per share and earnings per share (EPS) growth figures. The fund identifies 500 stocks eligible for inclusion.

Next, it looks at the value and quality of the best 250 stocks. Value is decided by looking at their earnings compared to the share price, which is essentially the price-earnings (P/E) ratio.

Quality is assessed by looking at the financial leverage (meaning debt levels) and the ROE ratios of the businesses.

By combining those aspects, you’re left with a high-quality, high-growth portfolio.

Excitingly, the index this fund tracks has delivered an average annual return of 19.7% over the past five years. That shows how well it can perform, in my view, though it’s not guaranteed to repeat itself.

The post 2 ASX ETFs I’d buy aiming for big returns for the next 5 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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.

Paladin Energy Ltd (ASX: PDN) shares have been in focus this week.

The uranium producer’s shares hit a 52-week high on Wednesday after it released a strong quarterly update.

Is it too late to invest? Let’s see what analysts at Bell Potter are saying about the stock.

Should you buy Paladin Energy shares?

Bell Potter is feeling very bullish about the uranium producer following its quarterly update, which was comfortably above expectations. Commenting on the quarter, the broker said:

Uranium production was 1.23Mlbs (BPe 1.1Mlbs, consensus 1.1Mlbs), a 16% increase on 1QFY26. Mill throughput improved over the quarter to 1.2Mt from 1.15Mt, with an uplift in grade processed of 524ppm as higher-grade ore was sourced from G & F pits (1QFY26 477ppm). Recoveries also improved to 91% from 86%. Sales were 1.4Mlbs (+169% QoQ), with closing uranium inventory at 1.6Mlbs (down from 1.8Mlbs).

Average realised price was US$71.8/lb, up from US$67.4/lb in 1QFY26 (estimated revenue US$100.5m). C1 costs were US$39.7/lb produced (1QFY26 $41.6, FY26 guidance US$44-$48/lb), cash costs (inclusive of stripping and stockpile costs) were ~US$48/lb produced. PDN finished 2QFY26 with cash and investments of US$278m and a US$70m revolving credit facility (1Q $269m + US$50m credit facility).

Overall, Bell Potter believes that this “result demonstrated the underlying performance capabilities of the business.”

And while management has yet to upgrade its production guidance for FY 2026, the broker suspects that it will happen, assuming no weather interruptions.

Valuation boost

In light of the above, Bell Potter has retained its buy rating on Paladin Energy shares with an improved price target of $15.30 (from $12.50).

Based on its current share price of $12.82, this implies potential upside of 19% for investors over the next 12 months.

Commenting on its recommendation, the broker said:

Our target price is increased to $15.30/sh (previously $12.50/sh) on adjustments to our production, sales and costs. PDN is demonstrating stabilised production ahead of consensus estimates. The market continues to ascribe little value to Patterson Lakes South (PLS) in our opinion, which provides upside as the project is de-risked through environmental permitting. EPS changes in this report are: FY26 +157%, FY27 +1% and FY28 -2%.

Our NPAT estimates are increased by US$29m (+205%), US$10m (+7%) and US$3m (+2%) in FY26, FY27 and FY28 respectively.

Overall, this could make Paladin Energy shares worth considering if you are looking for exposure to the booming uranium market.

The post Should you buy Paladin Energy shares after its strong update? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.

Shares in IperionX Ltd (ASX: IPX) are back in the spotlight after the company landed a major US defence-linked order that appears to validate its long-term strategy.

The IperionX share price is up 3.92% to $7.68 in early morning trade, and has now surged around 50% over the past month.

That rally reflects growing investor confidence following today’s announcement, which ties the company directly into US Army supply chains.

Let’s unpack what was announced.

A defence order that could open doors

IperionX revealed it has received a prototype purchase order valued at US$300,000 from American Rheinmetall. The order is for the production of 700 lightweight titanium components destined for US Army heavy ground combat systems.

The company said the initial order has the potential to lead to a significantly larger agreement if the prototype work is delivered successfully.

The components will be manufactured in the United States using 100% recycled titanium feedstock. Production will rely on IperionX’s patented hydrogen-assisted metal technologies, which are designed to deliver high-performance titanium at lower cost and with lower emissions than conventional methods.

Why titanium for defence is important

Replacing steel with titanium offers compelling advantages for modern military vehicles. According to IperionX, titanium components can deliver weight reductions of around 40% to 45% per component. That can reduce overall vehicle weight by hundreds of kilograms, depending on the design.

Lower vehicle weight improves acceleration, agility, operational range, and survivability. It also reduces ground pressure, improving mobility over soft or uneven terrain. As armoured vehicles add more protection and counter-drone systems, managing overall weight is becoming more important.

A defence tailwind worth watching

IperionX says it is currently the only domestic US producer of commercial-scale primary titanium metal. Titanium is designated as a strategic and critical material by the US government, reflecting long-standing reliance on overseas supply chains that the US is now working to reduce.

This order directly supports US priorities to reshore critical materials, cut dependence on offshore suppliers, and expand domestic manufacturing using recycled inputs.

Chief Executive Anastasios Arima said the purchase order demonstrates the application of IperionX’s recycled titanium technologies on key US ground combat platforms. He also highlighted the company’s positioning as a secure, low-carbon, US-based supplier.

Foolish Takeaway

The share price has already moved quickly, so some short-term volatility would not be surprising. But this announcement shows IperionX is starting to secure defence customers, which helps explain why the stock is now on more investors’ radars.

The post Up 50% in a month. Why this ASX stock’s latest US defence deal has investors paying attention appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

CSL Ltd (ASX: CSL) shares are trading around $177, a long way below their 52-week peak of $282.20. For a biotech that has been one of the ASX’s great long-term compounders, that kind of fall naturally raises a big question. Is this a genuine buying opportunity, or is the market telling us something has changed?

To answer that properly, you need to understand why the shares fell in the first place.

Why CSL shares declined so sharply

The sell-off has not been driven by a single issue, but by a cluster of disappointments that arrived at the same time.

The most important has been pressure on plasma margins. Plasma collection costs rose significantly after COVID as CSL worked to rebuild supply, while broader inflation lifted operating costs. Volumes recovered, but profitability lagged expectations, which mattered because CSL had historically delivered very reliable margin expansion.

Within that, the market was particularly disappointed with CSL Behring. This division had been positioned as the engine room of long-term growth, especially through immunoglobulins. Instead, growth slowed materially. That was a shock relative to expectations for steady, high-quality growth.

The Seqirus business also weighed on sentiment. Influenza vaccine demand, particularly in the US, proved weaker and more volatile than expected. That hurt earnings and challenged the view that vaccines would provide smoother diversification alongside plasma.

Guidance cuts compounded the problem. Investors had already lowered expectations once, only to see them revised down again. That sequence matters because it impacts confidence in near-term execution even if the long-term strategy remains intact.

There were also regional and narrative overhangs. Albumin demand in China became less predictable, adding uncertainty at an awkward time. Meanwhile, the longer-term gene therapy discussion resurfaced, not because it is an immediate threat, but because it gave investors another reason to question long-run assumptions.

What looks different at $177

At $177, expectations are far lower than they were when CSL traded above $250. The share price now reflects slower near-term growth, a gradual margin recovery rather than a rapid one, and more conservative assumptions around vaccines and China.

Importantly, the core business has not broken. CSL remains one of just a handful of global plasma leaders, operating in a highly consolidated market with significant barriers to entry. Plasma demand trends have not disappeared, and management continues to point to efficiency initiatives that should support margin recovery over time.

This means CSL does not need everything to go right to justify a higher share price. It simply needs fewer things to go wrong.

So, are CSL shares still a bargain?

I would not describe CSL shares at $177 as risk-free. Execution still matters, and patience is required. But relative to where expectations were at the peak, the risk-reward now looks far more balanced.

The share price decline has been driven more by disappointment and valuation reset than by a permanent deterioration in the business. If margins stabilise, earnings growth improves modestly, and confidence slowly rebuilds. CSL does not need to return to peak optimism to deliver respectable returns from here.

At $177, I think there is a credible case that CSL shares are a bargain for long-term investors willing to tolerate near-term uncertainty while waiting for the fundamentals to catch up.

The post Are CSL shares still a bargain at $177? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortescue Ltd (ASX: FMG) shares are falling on Thursday morning.

In morning trade, the iron ore giant’s shares are down 2.5% to $22.10.

Why are Fortescue shares falling?

Investors have been selling the company’s shares today following the release of its December quarterly production update.

According to the release, Fortescue reported total iron ore shipments of 50.5 million tonnes for the December quarter. This was down slightly on its first quarter shipments.

Nevertheless, the company achieved first half FY 2026 shipments of 100.2 million tonnes, which is a record and represents a 3% increase on the prior corresponding period.

Management believes this leaves the company well positioned to meet its full year shipments guidance of 195 million tonnes to 205 million tonnes.

Iron Bridge has strong half

Fortescue’s production from the Iron Bridge magnetite project continued to build during the quarter.

It achieved shipments of 2.2 million tonnes, which took first half Iron Bridge shipments to 4.3 million tonnes. This is up 37% year on year.

Iron Bridge concentrate achieved an average revenue of US$122 per dry metric tonne, outperforming benchmark indices due to its higher iron content.

On the cost front, Fortescue’s hematite C1 unit cost rose to US$19.10 per wet metric tonne during the quarter. This is up 5% from the September quarter and reflects higher diesel prices, exchange rate movements, and the normalisation of inventory impacts that had benefited the prior quarter.

For the half year, C1 costs averaged US$18.64 per tonne, which is slightly above the top end of its full year guidance range of US$17.50 per tonne to US$18.50 per tonne.

While its FY 2026 guidance remains unchanged, this modest cost pressure may help explain why Fortescue shares are weaker today, particularly given ongoing volatility in iron ore prices.

Commenting on the company’s performance, its growth and energy chief executive officer, Gus Pichot, said:

We continue to make disciplined progress across our global growth portfolio of metals, critical minerals, energy and technology opportunities. In line with our critical minerals strategy, this quarter we entered into a binding agreement to acquire the remaining 64 per cent of Alta Copper’s shares. Fortescue will apply its strong track record of project delivery and well-established technical, permitting and community engagement expertise to diversify and expand our copper portfolio and exploration footprint in Latin America.

We’ve also continued to progress studies into the Belinga Iron Ore Project in Gabon, establishing a Presidential Taskforce to streamline the planning and delivery of an integrated mine, rail and port solution.

The post Fortescue shares tumble as cost increase disappoints appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.