(Reuters) - Albemarle Corp (ALB.N) beat quarterly profit estimates on higher demand for bromine and raised its 2019 adjusted profit forecast on Wednesday, sending shares of the world’s largest lithium producer up over 10% in extended trading.
Sales of bromine, a chemical used to make fire extinguishers, were driven by demand in flame retardants for electronics, clear completion fluids, and polymer resins, despite weakness in automotive and construction, sectors that have been hit by trade tensions and fears of slowing global growth.
Revenue from the chemical surged 15.8% to $255.4 million in the second quarter, ahead of analysts’ estimates of $229.7 million, according to IBES data from Refinitiv.
Sales from the company’s largest segment lithium, used to make electric car batteries, rose only 2.3% to $324.8 million, compared with a 30.2% jump in the year-ago quarter. Analysts were expecting sales of $354.7 million.
Lithium demand has been affected by a slump in the sector, with its prices expected to be subdued in 2019, due to U.S.-China trade tensions and China’s cuts to electric vehicle subsidies.
To cope with the weakness, Albemarle early this month revised its deal to buy into Australia’s Mineral Resources Ltd’s (MIN.AX) Wodgina mine to lower its cash offer than it had previously stated.
“The recently announced amendments to our transaction with Mineral Resources Limited and our decision to delay indefinitely certain lithium expansion projects will allow us to reduce capital expenditures significantly,” Chief Executive officer Luke Kissam said in a statement.
Net income attributable to the company fell 49% to $154.2 million, or $1.45 cents per share in the quarter ended June 30.
The company raised its full-year adjusted profit forecast to between $6.25 and $6.65 per share, from $6.10 to $6.50 expected earlier, and maintained its sales forecast.
Total revenue rose nearly 4% to $885.1 million.
Excluding items, the company posted a profit of $1.55 per share, beating analysts’ estimates of $1.44 per share.
Reporting by Nishara Karuvalli Pathikkal; Editing by Sriraj Kalluvila and Shinjini Ganguli