(Reuters) -Albemarle, the world's largest producer of lithium for rechargeable batteries, posted a surprise second-quarter profit on Wednesday, helped by sustained demand for the metal sending its shares up over 7% after the bell.
Lithium's use in electric vehicles, large-scale battery storage and other electronic applications has grown rapidly, with demand up 24% last year and likely to grow 12% annually for the next decade, according to data from consultancy Fastmarkets.
Albemarle said its net sales
came in at $1.33 billion during the April-June period, 7% lower than last year but still above analysts' expectations of $1.22 billion, according to data compiled by LSEG.
The company said its revenue fell year-over-year as a result of lower pricing, which was offset by volume growth in its energy storage and specialties business segments.
Lithium prices have fallen more than 90% in the past two years due in part to oversupply in China, fueling layoffs, corporate buyouts and project delays across the globe.
To weather the pricing glut, Albemarle has taken measures such as job cuts and cancelling expansion projects - including a key U.S. lithium refinery.
Earlier this year, Albemarle launched a "comprehensive review of its cost and operating structure," which is expected to be completed by October.
The lithium producer on Wednesday lowered its capital expenditure plan for 2025 to be in the range of $650 million to $750 million, compared with its prior view of $700 million to $800 million.
The firm added its cash from operations rose to $538 million during the first half of the year and now expects to achieve positive free cash flow for the full year.
The Charlotte, North Carolina-based company reported quarterly adjusted profit of 11 cents per share, compared with analysts' expectations of a loss of 82 cents per share.
(Reporting by Vallari Srivastava in Bengaluru; additional reporting by Ernest Scheyder in Houston; editing by Alan Barona)
