What happened
The first-quarter financial results Livent (LTHM) reported after markets closed Tuesday had investors energized on Wednesday. Not only did it beat analysts' top- and bottom-line estimates, the lithium company upwardly revised its 2023 guidance. Shares rose by as much as 15.5% during the session. As of 2:13 p.m. ET, Livent was still up by 7.7%.
So what
Livent reported a 77% year-over-year sales increase to $253.5 million, a company record for quarterly revenue. Analysts on average had expected the company to report revenue of $233.5 million. At the bottom of the income statement, there was even more to get charged up about -- earnings per share of $0.55, which trounced analysts' consensus estimate of $0.39.
Beyond the company's Q1 performance, its increasingly bullish outlook regarding the remainder of 2023 was a catalyst for the stock's rise Wednesday. Previously, Livent had forecast 2023 revenue would be in the $1 billion to $1.1 billion range, but on Tuesday, management informed investors that it now anticipates 2023 revenue of $1.025 billion to $1.125 billion. In addition, the company raised its 2023 adjusted earnings before interest, taxes, depreciation, and amortization forecast to $530 million to $600 million from the prior forecast of $510 to $580 million.
There was also positive news regarding 2024. According to management, the company's expansion projects remain on track, which will help it grow lithium sales further. In 2023, for example, Livent expects to achieve a 20% year-over-year increase in lithium carbonate equivalent sales, but sales are expected to rise 40% year over year in 2024.
Now what
Considering Livent's strong start to the year and management's optimistic outlook, it's no wonder shares gained ground Wednesday. Even after that rise, the stock is still reasonably valued, trading at only 10.8 times forecast earnings. Investors interested in getting some lithium exposure into their portfolios should certainly have Livent on their radar.
