(Reuters) - Albemarle Corp, the world’s largest lithium producer, reported a lower-than-expected quarterly profit on Wednesday and forecast a double-digit drop in 2020 earnings on weak prices for the battery metal.
Lithium companies in the past year have been producing more than automakers currently need, denting prices. China, the world’s largest electric vehicle market, is also facing an economic slowdown due to the coronavirus.
Albemarle posted fourth-quarter net income of $90.4 million, or 85 cents per share, compared to $129.6 million, or $1.21 per share, a year ago.
Excluding one-time items, the company earned $1.73 per share in the quarter. Analysts expected $1.74, according to IBES data from Refinitiv.
For 2020, the Charlotte, North Carolina-based company forecast a drop in sales of at least 2%, to a range of $3.48 billion to $3.53 billion, and a dip in adjusted earnings of at least 16%, to about $4.80 to $5.10 per share.
Chief Executive Luke Kissam said the company should emerge stronger after the industry malaise settles.
“We have the best lithium resources in the world and they will serve demand over the next 10 to 15 years,” Kissam said in a statement.
Sales of lithium producers rose 20% to $411.1 million during the fourth quarter, as higher volumes offset a price drop. Sales of catalysts for refineries, which Albemarle has said are key to funding its lithium expansions, dropped.
Albemarle is set to host a conference call on Thursday to discuss the results.
Kissam said earlier this month he will retire in June for health reasons. The company’s board has started a search for his successor.
Shares of Albemarle rose less than 1% to $90 in after-hours trading.
Rival lithium producer Livent Corp is set to report its quarterly results on Thursday.
Reporting by Ernest Scheyder; Editing by Chris Reese and Bill Berkrot
Our Standards: The Thomson Reuters Trust Principles.