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Albemarle Reports Double-Digit Earnings and Revenue Growth

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Albemarle’s 1Q18 earnings

Albemarle (ALB) reported strong 1Q18 earnings on May 9. The company reported an adjusted EPS (earnings per share) of $1.30—an increase of 23.8% on a YoY (year-over-year) basis. Albemarle’s earnings were influenced by strong revenue growth, better operating efficiency, and improved cost control. The company’s cost of goods sold improved by 180 basis points on a YoY basis. Similarly, Albemarle’s selling general and administrative expenses improved by 280 basis points on a YoY basis.

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Albemarle’s revenues increased 13.8% to $821.6 million—compared to $722 million in 1Q17. The company’s revenue growth was primarily driven by continued growth in its lithium business. The lithium business grew 37.8% on a YoY basis due to higher prices, increased volumes, and favorable foreign currency. Albemarle’s Bromine specialties and Catalysts segments had revenue growth of 2.9% and 2.8%, respectively.

Albemarle increased its adjusted EPS outlook for fiscal 2018. The company expects its fiscal 2018 adjusted EPS to be $5.1–$5.40—an increase of 11% –18% on a YoY basis.

Albemarle’s stock price

Albemarle’s stock price declined 1.5% and closed at $98.54 for the week ending May 11. The company traded 8.5% lower than its 100-day moving average price of $107.70, which indicates a downward trend in the stock. On a year-to-date basis, the stock has declined 25%. FMC (FMC) and Sociedad Química y Minera de Chile S.A. (SQM) have decreased 6.1% and 3.9%, respectively. Albemarle’s relative strength index of 52 indicates that the stock isn’t overbought or oversold.

The Lithium ETF (LIT) has gained 1.4% for the week. LIT has invested 5.6% of its portfolio in Albemarle as of May 11. The fund also provides exposure to Tesla (TSLA) with a weight 4.1% as of May 11.

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