=Livent (LTHM) reported earnings on Tue 7 May 2019 (a/h)

Livent misses by $0.01, misses on revs; guides Q2 below consensus; lowers FY19 EPS and rev below consensus

• Reports Q1 (Mar) earnings of $0.12 per share, $0.01 worse than the S&P Capital IQ Consensus of $0.13; revenues fell 4.4% year/year to $98.3 mln vs the $105.43 mln S&P Capital IQ Consensus. Revenue, Adjusted EBITDA and adjusted earnings per share were all in-line with the guidance ranges, with price/customer mix, volumes and costs all consistent with previously communicated expectations. Operationally, the third lithium hydroxide line in China was successfully brought into commercial production during the quarter, and lithium carbonate operations in Argentina resumed normal levels following almost three weeks of lost production due to the heavy rains in late January. A total of ~1K tons of lithium carbonate production for 2019 were lost, higher than the Company indicated in February. Livent continues to move forward with its expansion programs in Argentina and in the United States, which remain on track with the first production from these expansions currently expected in the second half of 2020.
• Co issues downside guidance for Q2, sees EPS of $0.11-0.14, excluding non-recurring items, vs. $0.24 S&P Capital IQ Consensus; sees Q2 revs of $105-115 mln vs. $125.65 mln S&P Capital IQ Consensus.
• Co issues downside guidance for FY19, lowers EPS to $0.56-0.66, excluding non-recurring items, from $0.92-0.98 vs. $0.95 S&P Capital IQ Consensus; sees FY19 revs of $435-475 mln from $495-525 mln vs. $510.73 mln S&P Capital IQ Consensus. 
• There are two primary factors influencing Livent's outlook for the second quarter and the rest of the year, compared to prior guidance. These are the impact of the disruptions to operations in Argentina in the first quarter, which will lead to one-off costs mainly in the second quarter, and delays of 2019 orders of high-performance lithium hydroxide by a small number of customers, which will lead to lower volumes and lower average realized price for Livent's lithium hydroxide sales in 2019. Volumes are projected to be higher in the second quarter than in the first quarter, reflecting more available lithium hydroxide from the third manufacturing line in China. Customer mix will be similar to the first quarter, with a large long-term customer taking roughly two-thirds of its contracted volume for 2019 during the first half of the year. This timing is unrepresentative of historical patterns with this particular customer. In addition, Livent expects to increase deliveries to customers in China in the second quarter, relative to the first quarter. However, these deliveries will be at lower prices than those realized in 2018, reflecting current market conditions in China. Livent will also incur one-off costs in the second quarter, stemming from the impact of lost carbonate production in the first quarter. Livent does not expect to see a meaningful change in demand for high-performance lithium hydroxide for use in high-nickel cathode chemistries until late 2019 or early 2020 and has reduced its full-year forecasts for volume and pricing accordingly. These reductions, combined with cost headwinds from the Argentina operations due to lost production in the first quarter and unfavorable currency movements, has resulted in lower full-year revenue and earnings guidance.