Albemarle NYSE: ALB reported higher second-quarter sales, earnings and cash generation as lithium pricing improved and its specialties business benefited from stronger pricing and volumes.
Second-quarter net sales rose 31% from a year earlier to $1.7 billion, while adjusted EBITDA more than doubled to $858 million. The company’s adjusted EBITDA margin expanded to 49%. Net income attributable to Albemarle was $480 million, or $3.52 per diluted share.
Chief Executive Officer Kent Masters said the results reflected operational execution, cost discipline and strengthening conditions in the company’s key markets. The company generated $710 million in operating cash flow and $638 million in free cash flow during the quarter.
Energy Storage Pricing Drives Results
Energy Storage sales increased 78% year over year and segment adjusted EBITDA rose 229%, driven primarily by higher lithium pricing. Albemarle sold 65,000 metric tons of lithium carbonate equivalent, or LCE, during the quarter at an average realized price of about $20 per kilogram LCE.
Chief Financial Officer Neal Sheorey said the realized price was roughly 15% below market pricing, reflecting spodumene sales and a three-month pricing lag in the company’s long-term agreements.
For the full year, Albemarle now expects Energy Storage volumes of 225,000 to 235,000 tons LCE, ranging from flat to down 4% year over year. The outlook reflects a June 9 fire at the CGP3 plant at the Greenbushes joint venture, partly offset by stronger-than-expected production at Wodgina.
The CGP3 plant restarted Aug. 1 and is ramping up, although Albemarle now assumes it will reach full run rate in the first quarter of 2027. Masters said the plant had been ramping ahead of schedule before the incident. Wodgina, meanwhile, is operating all three processing trains and has benefited from better-than-planned ore availability and recoveries.
Albemarle expects third-quarter Energy Storage sales and adjusted EBITDA to decline sequentially, citing lower expected volumes and an assumption of lower lithium pricing. Margins are also expected to face pressure from the timing of higher-priced spodumene inventory moving through the company’s processing system.
Masters said lithium prices were near $20 per kilogram and that the market remained physically tight, though he declined to forecast prices. He said additional supply from Africa and Chinese lepidolite operations is beginning to return, but demand growth has required new supply to enter the market.
Specialties Outlook Raised
The company raised its 2026 outlook for its Specialties segment following a strong first half. Albemarle now expects Specialties net sales of $1.4 billion to $1.6 billion and adjusted EBITDA of $275 million to $325 million for the full year.
Second-quarter Specialties sales increased 20% to $424 million, while adjusted EBITDA rose 61% to $118 million. The segment’s adjusted EBITDA margin expanded by 700 basis points from the prior-year period to 28%.
Sheorey attributed the performance to higher pricing and volumes, as well as favorable mix, amid bromine-market disruptions related to the Middle East situation. He said Albemarle expects pricing to normalize during the second half after bromine prices peaked in April, and therefore anticipates lower sequential sales and EBITDA in the third quarter.
The company continues to estimate that Middle East-related supply-chain disruptions could have a full-year unmitigated impact of approximately $70 million to $90 million. Albemarle said it had not yet experienced much of that impact during the first half and has used proactive cost management to mitigate disruptions.
Masters said the company is on track to reach the high end of its $100 million to $150 million full-year cost and productivity-improvement target. Albemarle has achieved about $100 million of run-rate savings year to date, with approximately 40% coming from supply-chain and back-office initiatives and the remainder from manufacturing cost reductions, incremental volumes and improved yields.
Demand Forecasts Increase as Storage Gains Momentum
Management said global lithium consumption increased 45% year over year through May, led by stationary energy storage and improving electric-vehicle demand. Albemarle raised its 2026 forecast for stationary-storage battery production to 900 to 1,100 gigawatt hours, an increase of 100 gigawatt hours from its previous outlook.
The company also raised the low end of its 2030 stationary-storage forecast to a range of 1,500 to 2,000 gigawatt hours. As a result, it increased the low end of its 2030 total lithium-demand forecast by 100,000 tons.
Masters said stationary storage could account for about 30% of global lithium demand in 2026, approaching parity with light-duty electric vehicles. Global stationary-storage production has nearly doubled year over year, according to the company.
Global EV sales were up 10% year to date and increased 16% in the second quarter from the prior-year period, Albemarle said. European EV demand rose 31% year to date, while the rest-of-world market increased 90%, led by Brazil, Australia, India and South Korea.
Atacama DLE Project Advances
Albemarle also outlined progress on direct lithium extraction, or DLE, at Chile’s Salar de Atacama. The company submitted an environmental assessment permit in March for a project that could include up to six DLE trains, though its planned initial investment would begin with one train.
The proposed process would operate alongside the company’s existing solar evaporation ponds. Lithium-rich brine would be sent both to the existing ponds and to the DLE plant, with the DLE output returning to final evaporation ponds before conversion into battery-grade lithium carbonate at La Negra.
Masters said Albemarle’s integrated pilot plant has operated for more than a year and accumulated more than 3,000 operating hours. The pilot has demonstrated lithium recoveries above 90%, compared with roughly 30% to 40% for a conventional pond system and 50% to 60% using Albemarle’s existing yield-improvement technology.
The company said the project remains subject to regulatory approvals, community consultation and further technology validation. Masters characterized the initiative as part of Albemarle’s effort to pursue long-term growth through existing resources, infrastructure and operating expertise.
About Albemarle (NYSE:ALB)
Albemarle Corporation is a leading global specialty chemicals company primarily engaged in the production and distribution of lithium, bromine, and catalysts. Its lithium segment supplies key components used in rechargeable batteries for electric vehicles, portable electronics, and grid storage systems. The company's bromine specialty products serve a wide range of industries, including oil and gas drilling fluids, fire safety solutions, and water treatment. In its catalysts division, Albemarle provides products for petroleum refining, chemical processing and emissions control.
Founded in 1994 as a spin-off from Ethyl Corporation, Albemarle has grown through strategic acquisitions and capacity expansions to become one of the world's foremost chemical producers.
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