Albemarle ‘Really Suprises’ With Earnings and Boosts Guidance Again for 2022

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Lithium demand is rising as more electric vehicles are sold.

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Cristobal Olivares/Bloomberg

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Lithium miner Albemarle crushed second-quarter earnings expectations. It also crushed its own guidance. It was quite a beat-and-raise quarter for the company.

Albemarle (ticker: ALB) announced adjusted per-share earnings of $3.45 from $1.48 billion in sales. Wall Street was looking for $3.04 from $1.43 billion in sales.

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It’s another earnings beat, the company’s 13th consecutive, according to Bloomberg. What’s more, the company raised guidance for the third time in 2022.

Management now expects to generate earnings of about $20.75 a share from $7.3 billion in sales in 2022. Prior guidance, given in late May, projected earnings of about $14.65 a share from $6 billion in sales.

It’s a huge increase. The company has managed to capture more of lithium’s price rise in its current business. Benchmark lithium prices have risen more than 400% over the past year.

Investors certainly were impressed. Shares rose 4.8% in after-hours trading Wednesday to about $251.

Wall Street was impressed too. “Another huge beat and raise,” wrote Citigroup analyst PJ Juvekar. “Price leverage surprises — really surprises — to the upside,” wrote Evercore ISI analyst Stephen Richardson.

Neither had much negative to point out. Richardson noted that a tight lithium market is providing Albemarle with “unprecedented pricing power.”

Both analysts rate Albemarle stock a Buy. Juvekar’s price target is $289 a share. Richardson’s price target is $280.

Lithium prices have been moving up as demand for lithium-ion batteries used to power electric vehicles grows.

Management will host an earnings conference call on Thursday at 9 am Eastern time to discuss results. Analysts and investors will want to hear about the direction of lithium pricing in 2023 as well as where lithium prices might level out in the long run.

Coming into Thursday trading, Albemarle shares have risen about 2% this year, while the S&P 500 and Dow Jones Industrial Average have fallen about 13% and 10%, respectively.

Write to Al Root at [email protected]


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