When Albemarle Corp. (NYSE: ALB), the world’s largest producer of lithium, reported third-quarter results after markets closed Wednesday, the company reported adjusted earnings per share (EPS) of $1.31 on revenue of $777.75 million. In the year-ago quarter, EPS came in at $1.08 on sales of $754.89 million. Analysts had been looking for adjusted EPS of $1.25 and revenue of $804.4 million.

That revenue miss comes despite higher pricing to customers and higher volume in two of the firm’s three segments. Lithium sales volumes were hampered by unexpected closures of three manufacturing plants.

Lithium sales totaled $270.9 million in the quarter, an increase of just 0.6% compared with the third quarter of last year. Pricing increases pushed net sales up by approximately $16.2 million, but overall net sales were up just $1.7 million. The difference shows the impact of plant closures on sales.

Albemarle stock hit a high of around $144 in November of last year before dropping to below $87 in May. Since then the stock has bounced around in a fairly narrow range that topped out at about $108 on October 29. Over the past 12 months, the shares are down 28% compared to a gain of over 8% for the S&P 500.

Demand remains strong for lithium as new battery plants are being planned by automakers like Tesla and Daimler and battery storage for renewable energy generation by solar and wind power continue to come down in price and rise in popularity.

To take advantage of the rise in demand, Albemarle has to raise production. CEO Luke Kissam commented:

Pricing in lithium continued as expected with prices up versus prior year. We also continue to make meaningful progress on extending our long-term lithium supply agreements. While unexpected shut downs at three of our lithium manufacturing sites resulted in volume shortfalls during the quarter, all facilities are now back on line and operating at forecasted rates.

Albemarle has claimed to have developed a new process to more than triple production from its Chilean mines without using more water. Details have not been forthcoming, however, and, according to Reuters, the “assertion [is] drawing increased scrutiny from regulators and investors pushing for more details.”

The company reaffirmed previous guidance for a net sales gain of 7% to 14% to $3.3 billion to $3.5 billion and adjusted EPS up 15% to 20% in a range of $5.30 to $5.50. Analysts were looking for full-year EPS of $5.39 and revenue of $3.39 billion. Analysts have 2019 fiscal year estimates for EPS of $6.09 and revenue of $3.62 billion.

Shares traded down as much as 5% in Thursday’s premarket session but were last seen down about 1.6% in the mid-morning action, at $106.25 in a 52-week range of $86.75 to $143.66. The 12-month consensus price target was $126.30 before the report was released.

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