Pilbara Minerals share price on watch following Q1 shocker

This lithium giant has fallen short of expectations on all key metrics. But how much of this was already priced in?

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The Pilbara Minerals Ltd (ASX: PLS) share price will be one to watch on Thursday.

That's because the lithium miner has just released its highly anticipated quarterly update.

Let's see how the company performed during the three months ended 30 September.

Pilbara Minerals share price on watch

According to the release, Pilbara Minerals reported production of 144,200 dry metric tonnes (dmt) of spodumene. This is down a disappointing 11% on the previous quarter and well short of the market's expectations.

For example, Goldman Sachs was forecasting production of 150,000 dmt and the consensus estimate was 156,000 dmt.

The company's sales volumes were also down heavily quarter on quarter. Pilbara Minerals sold 146,400 dmt of spodumene, which was down 17% from the fourth quarter.

As a comparison, Goldman Sachs was expecting sales volumes 148,000 dmt, whereas the consensus estimate was a lofty 162,000 dmt.

Falling the heaviest during the quarter was the average realised price that the company received for its lithium during the period. It commanded a price of US$2,240 per tonne, which was down 31% quarter on quarter and 47% year on year.

Once again, this fell short of the market's expectations, which could be bad news for the Pilbara Minerals share price today. Goldman Sachs was expecting a realised spodumene price of US$2,433 per tonne and the market was forecasting US$3,140 per tonne for the period.

Finally, to make it four misses out of four, the company's costs came in higher than Goldman Sachs was expecting at US$489 per tonne. This was up 16% quarter on quarter, compared to the broker's estimate for a 10% lift.

What about its financials?

Pilbara Minerals released limited financial data for the quarter. But what we do know is that its revenue was down 42% from the prior quarter at $493.1 million and its cash decreased to $3 billion from $3.3 billion.

The latter reflects the payment of a final dividend and its investment in growth projects. Management advised that its cash margin from operations remained strong at $360 million for the period, notwithstanding lower spodumene prices.


Management expects demand for lithium to remain consistent in the current quarter. However, it has warned that lithium prices are likely to remain volatile. It explains:

Demand for lithium raw materials is expected to remain consistent in Q2 FY24 which is typically a stronger period for EV sales. Market pricing for spodumene concentrate and lithium chemicals is however likely to continue to remain volatile in the near-term given uncertain macroeconomic conditions and closely managed inventories in the supply chain.

The long-term outlook for lithium materials supply remains positive with an expected structural deficit of lithium materials supply relative to the expected demand for lithium-based products such as electric vehicles and battery energy storage.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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