Lithium Argentina AG (NYSE: LAR) had a rough Tuesday. The lithium producer reported third-quarter earnings of 8 cents per share, a penny shy of the 9-cent analyst estimate, and the market responded by knocking the stock down 6.42% to $4.15 by the time of publication.

But here's the thing about a one-cent miss: it tells you almost nothing about the actual business. And the actual business, if you dig into the numbers, is doing something considerably more interesting than the headline EPS figure suggests.

Production and Revenue Are Moving in the Right Direction

The company's flagship Cauchari-Olaroz operation in Argentina churned out 9,550 tonnes of lithium carbonate from its Stage 1 project in the third quarter, up 3% from the previous quarter. Revenue climbed 6% sequentially to $184 million, and the driver was volume: sales volumes jumped 18%, which was enough to more than offset a 10% decline in realized lithium prices.

That's the kind of math lithium investors have gotten used to lately. Prices have been soft, but if you can move more product, you can still grow the top line. And Cauchari-Olaroz isn't just growing revenue, it's doing so profitably. The operation posted a 67% cash operating margin and generated $95 million in operating cash flow.

Adjusted EBITDA came in at $113 million, and the company's cash position climbed to approximately $312 million. The operation also distributed $100 million to joint venture partners during the quarter, with another $30 million going out after quarter-end. That brings total distributions during 2026 to roughly $230 million. Over the past 12 months, Cauchari-Olaroz has generated approximately $350 million in adjusted EBITDA.

So yes, the EPS number was a penny light. But the cash machine is running.

The Expansion Pipeline Is Where Things Get Interesting

Lithium Argentina isn't content to sit on Stage 1. The company plans to expand Cauchari-Olaroz through its Stage 2 project, which could add 45,000 tonnes of annual capacity. That would lift total annual capacity to approximately 85,000 tonnes.

The numbers on Stage 2 are compelling, at least on paper. The project carries an estimated after-tax net present value of $3.1 billion and a 28.5% internal rate of return. Those estimates assume lithium prices of $18,000 per tonne, operating costs of $5,000 per tonne, and initial capital spending of approximately $1 billion.

There's also a smaller but faster-moving piece: a 10,000-tonne modular direct lithium extraction expansion that the company plans to accelerate. It's targeting production in 2028, subject to regulatory approvals.

The Ganfeng Joint Venture Changes the Scale of the Game

Perhaps the biggest development is the completed joint venture with Ganfeng, which combines three lithium projects under the PPG platform. Ganfeng holds a 67% stake, while Lithium Argentina owns 33%.

PPG targets annual production of 150,000 tonnes, with estimated operating costs of $5,000 per tonne. A 2025 scoping study valued the project at $8 billion on a 100% basis, assuming lithium prices of $18,000 per tonne. The partners have already invested approximately $1.8 billion across the projects.

Management expects RIGI approval by year-end, which could clear the way for engineering, permitting, and financing activities. RIGI, for those unfamiliar, is Argentina's incentive regime for large investments, and getting that stamp of approval would be a meaningful de-risking event.

When you add it all up, Cauchari-Olaroz Stage 2 and PPG together represent approximately $4.1 billion in project NPV attributable to Lithium Argentina's ownership interests. That's a big number for a company with a market cap that's currently a lot smaller than that.

The company says it plans to pursue phased expansions while maintaining financial flexibility and prioritizing shareholder returns. In other words: grow, but don't blow up the balance sheet doing it.

LAR Price Action: Lithium Argentina shares were down 6.42% at $4.15 at the time of publication on Tuesday, according to market data.