Albemarle Lithium Facility in Silver Peak, Nevada, U.S.
Albemarle’s Silver Peak facility in Nevada, pictured here, is part of a global portfolio of projects across Chile, Australia, China and the United States. Reuters

Albemarle's revenue was $2.31 billion in the third quarter of 2023, up 10% from last year but falling short of analysts' expectation of 14% growth, the company revealed Wednesday in its quarterly report -- a mixed sign for the embattled global lithium sector.

Albemarle's profit was $302.5 million in the third quarter, down 66.3% from nearly $897.2 million in the same period of 2022.

Earnings per share were at $2.74 per share. Analysts polled by Zacks Investment Research had predicted $3.70 per share.

The earnings report comes at a critical point for the North Carolina-based global lithium giant, which has recently navigated inconsistent prices of battery-grade lithium and a failed multibillion dollar attempted acquisition of an Australian lithium miner.

"We remain bullish about Albemarle's long term growth," CEO Kent Masters told shareholders in the company's quarterly earnings call.

Albemarle shares have declined over 40% since the beginning of the year. The stock lost an additional 3.5% in after-hours trading on the New York Stock Exchange, opening at $118.65 per share.

Headwinds In The Lithium Market

Albemarle and other multinational lithium corporations have faced near-term challenges, driven by volatile prices for lithium carbonate. Those prices are now down nearly 50% from the global peak last December, disrupting the lithium market in recent months.

Albemarle is the largest lithium firm in the world by market capitalization, and the second largest by annual lithium output (behind Chile's Sociedad Química y Minera).

On Albemarle's earnings call, CEO Kent Masters alluded to supply chain issues as a driving factor behind the company's excess lithium revenue due to a lack of downstream capacity in the lithium refining and battery production value chains. High global interest rates and shipping costs drove up costs in the third quarter.

But the company doesn't view the recent supply glut as a substantial obstacle, predicting a 30-35% increase in revenue for the FY 2023. Albemarle aims to expand lithium production in 2024 through new and expanded hard-rock mining contracts in the U.S. and Australia, in particular.

Company representatives qualified Albemarle's growth projection, noting it is contingent on stable, if not rising, global lithium prices.

Albemarle notably did not comment on its recent failed acquisition of Australian lithium miner Liontown Resources, which was canceled in mid-October after intervention from Gina Rinehart's Hancock Prospecting.

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