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Could Albemarle’s 4Q17 Revenue Meet Expectations?

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Albemarle’s 4Q17 revenue expectations

Albemarle (ALB) is expected to report revenue of $795.5 million in 4Q17, which implies 14.2% growth year-over-year. In 4Q16, ALB reported revenue of $696.7 million. ALB’s revenue has been on an upward trend since 3Q16.

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Driving factors

Albemarle’s revenue is expected to be driven by its lithium segment, which is expected to continue to grow by double digits. The higher demand for lithium batteries from end-user markets such as consumer products is on the rise. The ever-growing demand for electric vehicles and grid storage is expected to drive volumes. However, lower lithium prices due to oversupply could impact ALB’s revenue.

Chile’s state-run economic development agency could raise Sociedad Química y Minera’s (SQM)’s production capacity to 180,000 metric tons through 2030. As a result, many believe that supply could be higher than demand, resulting in lithium prices falling.

Furthermore, the launch of new technology, Granite, could help refiners improve profitability in fluid catalytic cracking, which could drive Albemarle’s revenue growth. Continued weakness in the US dollar could also boost its revenue.

Investors can indirectly hold Albemarle through the Global X Lithium ETF (LIT), which has invested 5.8% of its holdings in Albemarle. The fund also provides exposure to FMC (FMC) and Tesla (TSLA), of 24.7% and 3.9%, respectively.

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