January 29, 2023
Chicago 12, Melborne City, USA

Elon Musk suggested getting into the lithium business, and these surging stocks show why


Lithium is becoming a lucrative business as electric vehicles become more prevalent and miners enjoy the rewards.

Albemarle Corp. ALB,
+ 9.31%
Earnings and revenue estimates were blown out of proportion in the first quarter earnings report on Wednesday afternoon, and executives added $ 1 billion to their annual sales forecast, with shares rising 15% in after-hours trading. That performance followed a report from Levant Corporation LTHM on Tuesday afternoon,
+ 30.25%
That did almost the same thing.

Both companies mine lithium, an important component of many batteries, especially those made for electric vehicles. As more automakers move into the production of electric vehicles, demand and prices for lithium have risen, according to Tesla Inc.
+ 4.77%
Chief executive Elon Musk mentioned last month.

“I would definitely encourage entrepreneurs there who are looking for opportunities to enter the lithium business. Lithium margins are virtually software margins at the moment, ”Musk said in an April 20 EV company earnings call.

“I think we are seeing cases where the price of spot lithium is 10 times higher than the cost of extraction. So, we are talking about 90% margin here. Can more people get lithium business? Do you like minting money? Well, the lithium business is for you, “continued the mask.

Albemarle reported first-quarter sales of $ 253.4 million, or $ 2.15 per share, or 13 1.13 billion, up from $ 829.3 million a year earlier. After adjusting for income tax expenses and other items, the company reported earnings of 3 2.38 per share, more than double the োর্ট 1.10 per share reported at the same time a year ago. According to Factset, analysts expected a consistent earnings of 1. 1.64 per share on 1.04 billion in sales.

Lithium was the biggest driver of outperformance, as the component’s net sales nearly doubled from $ 279 million to $ 550.3 million, and the profits were much higher. Albemarle reported a consistent Ebitda of $ 308.6 million from lithium sales in the quarter, nearly three times the total of $ 106.4 million reported a year ago.

Albemarle executives have increased their net sales and profit guidance “primarily due to the continued strength of its lithium and bromine business prices,” they said in a release on Wednesday. They now expect নেট 5.2 billion to $ 5.6 billion in annual net sales, after previously saying $ 4.2 billion to $ 4.5 billion, and a consistent earnings per share of $ 9.25 to $ 12.25, ranging from $ 5.65 to 65 6.65.

Albermarle shares rose 9.3% to নিয়মিত 215.47 in Wednesday’s regular session, joining Levant’s rise, then close to $ 250 in the next hour’s trading. Shares rose 32.9% last year as the S&P 500 Index SPX,
+ 2.99%
0.3% increase.


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