What caused SQM's earnings to outperform forecasts in Q4?

Sociedad Quimica y Minera de Chile S.A. (SQM) reported slightly better-than-expected earnings for Q4 2024, with a net income of $122.6 million and a diluted EPS of $0.42, compared to a consensus estimate of $0.51. While the company missed earnings expectations, the revenue of $1.07 billion was slightly above the expected $1.00 billion. The positive surprise in net income can be attributed to:

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q1|1.084517E9|-8.68667E8|-3.044|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q2|1.293617E9|2.14807E8|0.7478|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q3|1.076869E9|1.33665E8|0.4601|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q4|1.0738E9|1.226E8|0.42|169|

|code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code|
|---|---|---|---|---|---|---|---|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q1|-215.58523986811045|-52.09413167833558|-215.9486534872205|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q2|-63.013158483795536|-36.9502778372124|-63.18613695662876|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q3|-72.24500559605805|-41.48277960722942|-72.58372065308069|169|
|SQM|SQM.N|Sociedad Quimica y Minera de Chile|2024 Q4|-40.42759961127308|-18.13052759987801|-40.845070422535215|169|

1. **Lithium Sales Volume**: SQM sold nearly 205,000 metric tonnes of lithium in 2024, with a record high of over 58,000 metric tonnes in Q4. Lithium market growth was estimated at 25% in 2024 compared to 2023, and expected demand growth for 2025 is approximately 17%. Higher lithium sales volumes, especially in Q4, contributed to the company's revenue and profitability.
2. **Iodine Sales Volume**: The iodine segment experienced strong price growth and record volumes, driven by demand recovery in X-ray contrast media applications. Record volumes in iodine sales in 2024 indicate increased demand and higher revenue from this segment.

Despite these positive factors, SQM's earnings were impacted by a one-time charge of approximately USD 1.1 billion due to a tax dispute, which affected the net income significantly. Additionally, there was a decline in lithium prices quarter over quarter in 2024, although this trend softened in the fourth quarter. Production of potash is expected to decrease by 50% in 2025 as the company focuses more on lithium production. The company may face a funding gap for capital requirements due to current lithium prices.