By Vallari Srivastava
(Reuters) -Albemarle, the world’s largest producer of lithium for rechargeable batteries, posted a shock second-quarter revenue on Wednesday, helped by sustained demand for the steel, sending its shares up over 6% after the bell.
Lithium’s use in electrical automobiles, large-scale battery storage and different digital purposes has grown quickly, with demand up 24% final yr and prone to develop 12% yearly for the subsequent decade, in line with knowledge from consultancy Fastmarkets.
Albemarle mentioned its web gross sales got here in at $1.33 billion through the quarter, 7% decrease than final yr however nonetheless above analysts’ expectations of $1.22 billion, in line with knowledge compiled by LSEG.
Its income fell year-over-year because of decrease pricing, which was offset by quantity progress in its power storage and specialties enterprise segments.
Lithium costs have fallen greater than 90% up to now two years due partly to oversupply in China, fueling layoffs, company buyouts and undertaking delays throughout the globe.
To climate the pricing glut, Albemarle has taken measures reminiscent of job cuts and cancelling enlargement tasks – together with a key U.S. lithium refinery.
Earlier this yr, Albemarle launched a “complete evaluation of its price and working construction,” which is anticipated to be accomplished by October.
The corporate on Wednesday lowered its annual capital expenditure plan to be within the vary of $650 million to $750 million, in contrast with its prior view of $700 million to $800 million.
Albemarle’s money from operations rose to $538 million through the first half of the yr and it now expects to generate optimistic free money stream (FCF) in 2025.
Scotiabank analyst Ben Isaacson mentioned that whereas the market would reply favorably to the FCF outlook, there could possibly be downward revisions to the 2026 forecast as Albemarle’s long-term agreements start to run out.
The Charlotte, North Carolina-based firm reported quarterly adjusted revenue of 11 cents per share, in contrast with expectations of a lack of 82 cents per share.
(Reporting by Vallari Srivastava in Bengaluru; further reporting by Ernest Scheyder in Houston; enhancing by Alan Barona)