Adds earnings comparison, stock in paragraphs 4 and 5
May 7 (Reuters) - Arcadium Lithium ALTM.N, formed earlier this year with the merger of U.S. lithium miner Livent and Australia's Allkem, posted a drop in first-quarter profit on Tuesday due to a decline in prices for the metal used to make electric vehicle batteries, although results beat Wall Street's expectations on cost cuts.
Global supplies for lithium outpaced demand during 2023 and fueled a glut that has dragged on prices, hurting Arcadium and other producers. However, the industry has stayed bullish on long-term demand for the battery material due to the global electrification trend.
Arcadium posted income of $15.6 million, or 1 cent per share, for the three months ended March 31, down from $114.8 million, or 23 cents per share, last year. The results were consolidated between the two combined companies.
Excluding one-time items, Arcadium earned 6 cents per share during the quarter. By that measure, analysts expected earnings of 4 cents per share, according to IBES data from LSEG.
The results were helped in part by cost cuts, including Arcadium laying off about 11% of its staff during the quarter.
Shares of the Philadelphia-based company closed Tuesday at $4.74 and were unchanged in after-hours trading.
Arcadium's biggest rival and the world's largest producer of lithium, Albemarle ALB.N, said last week that higher electric vehicle (EV) sales in China in April, including at major automaker BYD 002594.SZ, is a positive sign for lithium prices, but cautioned that current pricing would limit projects from getting off the ground.
"We see encouraging signs in the lithium market and underlying demand fundamentals remain very strong," Arcadium CEO Paul Graves said in a statement.
The company achieved average realized pricing of over $20,000 per product metric ton for its combined hydroxide and carbonate volumes in the first-quarter.
(Reporting by Arunima Kumar in Bengaluru and Ernest Scheyder in Houston; Editing by Shailesh Kuber and Stephen Coates)
((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94 ;))