Albemarle Posts Surprise Q2 Profit on Lithium Demand

Albemarle Corporation reported a surprise Q2 profit due to steady demand for lithium in electric vehicles and energy storage, despite volatile pricing. Adjusted earnings were $0.11 per share, beating expectations of a $0.78 loss, and revenue rose to $1.33 billion, surpassing the $1.22 billion estimate. However, the company trimmed its full-year capital expenditure guidance to $650-700 million and maintained its earnings scenario assumptions based on lithium prices holding at $9/kg.

Albemarle Corporation (NYSE: ALB) announced its second-quarter 2025 results, showing a surprise profit driven by steady demand for lithium in electric vehicles (EVs) and energy storage, despite volatile pricing. The company reported adjusted earnings of $0.11 per share, surpassing expectations of a $0.78 loss, and revenue rose to $1.33 billion, exceeding the $1.22 billion estimate [2].

Despite a 7% decline in net sales compared to the prior-year quarter, primarily due to lower pricing in energy storage, Albemarle's adjusted EBITDA of $336 million increased by $50 million year-over-year. The company attributed this resilience to reduced input costs, ongoing cost and productivity improvements, and an improved energy storage product mix [1].

The lithium market has seen significant growth, with global consumption increasing by about 35% year-to-date, driven by strong growth in stationary storage and EVs. Albemarle expects the market to return to more balanced conditions next year and potentially return to deficits after that, as demand continues to outstrip supply [1].

Albemarle achieved a 100% run rate on its $400 million cost and productivity improvement target and reduced full-year 2025 capital expenditures to $650 million to $700 million, down about 60% year-over-year. The company redeemed preferred shares held for an aggregate value of $307 million, enhancing liquidity and improving leverage metrics with a net debt to adjusted EBITDA ratio of 2.3x [1].

Kent Masters, Chairman and CEO of Albemarle, stated, "We delivered strong second quarter results and are maintaining our previous outlook considerations assuming current lithium market pricing persists. Due to recent cash management actions, we now expect to generate positive free cash flow for the year. Our team has established a track record of operational excellence and has successfully executed proactive measures to reduce operating and capital costs while preserving our long-term competitive position" [2].

The company maintains its 2025 outlook considerations and expects to achieve positive free cash flow, supported by these strategic actions. Albemarle is maintaining its prior full-year outlook considerations for Energy Storage, which are based on observed lithium market price scenarios, with the previously published $9/kg LCE ranges expected to apply assuming current lithium market pricing persists for the remainder of the year [2].

References:

[1] https://www.ainvest.com/news/albemarle-q2-2025-earnings-call-unpacking-contradictions-supply-dynamics-pricing-strategies-market-volatility-2507/
[2] https://www.prnewswire.com/news-releases/albemarle-reports-second-quarter-2025-results-302517789.html