By Dhirendra Tripathi
Investing.com – Albemarle stock (NYSE:ALB) lost more than a tenth of its value in premarket trading Thursday after the lithium producer’s annual earnings forecast failed to live up to its lofty valuation.
Albemarle’s full-year adjusted earnings forecast of $5.65-$6.65 per share fell short of expectations, despite implying a rise of 50% from last year's $4.04. EPS in the fourth quarter were $1.01.
Investors “were hoping it’d be a blowout because the spot lithium prices are so high,” Bloomberg quoted KeyBanc Capital Markets senior analyst of U.S. chemicals Aleksey Yefremov as saying. He called the guidance “surprisingly low”, according to the agency.
Lithium is the most critical element in batteries that power electric vehicles. With the shift toward electric vehicles gaining momentum, lithium prices have skyrocketed in recent months, driving Albemarle stock up accordingly.
The 10% drop, if validated at the opening, would leave Albemarle still trading at 35 times its central earnings forecast for this year.
Net sales in the fourth quarter rose 2% to $894 million but the company posted a loss of $3.8 million, blaming cost overruns, labor- and pandemic-related issues at its Kemerton project in Australia. On an adjusted basis, profit per share was $1.01.
Current-year net sales are seen between $4.2 billion and $4.5 billion.