Shares of lithium miner
rose Thursday after earnings fell dramatically year over year but still beat Wall Street estimates.
on Wednesday evening reported first-quarter adjusted earnings per share of 26 cents from sales of $1.4 billion. Wall Street was looking for a profit of 25 cents a share from sales of $1.3 billion.
Shares closed up 5.3% at $125.30 on Thursday, while the S&P 500 and Nasdaq Composite rose 0.9% and 1.5%, respectively.
A year ago, Albermarle reported a profit of $10.32 a share from sales of $2.6 billion.
Earnings and sales have fallen with the price of lithium. Benchmark lithium prices started 2024 at roughly $14,000 per metric ton. They started 2023 at about $73,000 a ton.
Advertisement – Scroll to Continue
Increasing supplies of lithium and slowing demand growth for electric vehicle are partly responsible for the falling prices. Lithium is a key component of the batteries that power EVs.
”It feels like we’re in execution mode,” CEO Kent Masters told Barron’s. In the current tough market,
has to focus on what it can control, such as getting new facilities running efficiently.
“We’ve pulled back a little on investment,” Masters said. Albemarle plans to spend about $1.6 billion to $1.8 billion in 2024, down from $2.1 billion in 2023. Spending can fall to about $1 billion and still allow the company to maintain existing operations.
Advertisement – Scroll to Continue
Evercore ISI analyst Stephen Richardson called the quarter confusing in a report Wednesday. Tax accounting helped earnings. And the company sold some intermediate products to generate earnings and cash. Typically, Albemarle would upgrade all of its intermediate products to finished goods.
“While this business looks to be weathering the [commodity price] trough, we suspect the debate remains the shape of the lithium price recovery and the stabilization/strengthening of [lithium] index prices,” wrote Richardson.
Lithium prices have risen about $2,000 a ton from recent lows.
Advertisement – Scroll to Continue
Albemarle left its 2024 guidance unchanged. That guidance is based on lithium prices ranging from $15,000 to $25,000 a ton. Based on the wide range, earnings before interest, taxes, depreciation, and amortization, or Ebitda, could fall anywhere between $900 million and $2.6 billion.
First-quarter Ebitda was $291.2 million. For the full year, Wall Street projects Ebitda of $1.3 billion. Ebitda in 2022 and 2023 came in at $3.5 billion and $3.4 billion, respectively. Investors hope 2024 is the bottom for the lithium pricing cycle—and Albemarle’s Ebitda.
Thursday’s gains leave Albemarle shares down about 13% so far this year.
Write to Al Root at allen.root@dowjones.com
