Livent shares tumble 22% on sales miss, guidance cut

Livent’s battery-grade lithium hydroxide monohydrate. Image courtesy of Livent Corp

Lithium chemicals supplier Livent Corp. (NYSE: LTHM) saw its shares tumble by over 22% on Wednesday on the back of a disappointing Q1 earnings release, along with a substantial cut in full-year guidance. The company’s market capitalization now sits at $1.2 billion.

Livent, which was spun out of FMC Corp. and went public last year, reported Q1 revenue of $98.3 million, about $5 million below analysts’ expectations. Part of the reason was the company lost almost three weeks of production in Q1 at its Argentina facilities due to heavy rain.

More worrisome for investors is that the company has reduced its revenue guidance for the year from $495-$525 million to $435-$475 million, well below the analyst consensus of $510 million. Second quarter sales are expected to miss expectations as well (forecast to be $105-$115 million vs. consensus estimate of $124 million).

Regarding its full-year guidance cut, the company warns that a deteriorating demand for lithium hydroxide will impact its sales for the rest of the year. The price of lithium hydroxide has fallen by 5.8% since the start of the year, according to data compiled by Benchmark Minerals Intelligence. Overall, the lithium price is down over 38% over the past year.

Livent, whose lithium products are used in Tesla car batteries, said a number of customers had delayed their 2019 orders, which could lead to lower sales volumes and lower prices.

“We are seeing weaker near-term demand for our high-performance lithium hydroxide, as several major customers have informed us about recent decisions to delay their own commercial launches of high-nickel cathode chemistries,” CEO Paul Graves said in a statement.

“This will result in lower delivered volumes of lithium hydroxide to these customers in 2019 than previously indicated and lower overall sales volumes for the year,” Graves said.

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