Albemarle, the world's largest producer of lithium, raised its 2023 profit forecast on Wednesday after reporting better-than-expected quarterly results, and it shares jumped as the company cited rising global appetite for the metal used to make electric vehicle batteries.
Shares of the Charlotte, North Carolina-based company surged 4.5% to $212 in after-hours trading.
Albemarle said it expects lithium demand to increase further in coming months due to the push to electrify much of the world's economy. The company produces the metal in Chile, Australia and China, and is the rapidly expanding inside the United States, where it has long been the only lithium producer.
"We remain confident in the long-term outlook for our businesses," CEO Kent Masters said in a press release.
Tesla, Ford and many other automakers buy lithium from Albemarle.
The company posted net income for the second quarter ended June 30 of $650-million, or $5.52 per share, compared with $406.8-million, or $3.46 per share, in the year-ago period.
Excluding one-time items, Albemarle earned $7.33 per share. By that measure, analysts expected earnings of $4.44 per share, according to IBES data from Refinitiv.
Sales in the company's Energy Storage division, which sells lithium, more than doubled to $1.76-billion. For the year, Albemarle expects the price at which it sells its lithium to jump nearly 30% from 2022 levels.
For the full year, Albemarle raised its forecast for adjusted earnings to a range of $25 to $29.50 per share. The company previously had expected its adjusted earnings for the year to come in at between $20.75 and $25.75 per share. Albemarle also raised its revenue forecast and its 2023 budget.
The company plans to hold a conference call with investors to discuss the quarterly results on Thursday.
Earlier this week, Albemarle said it would pay $82.6-million for a 5% stake in Canada-based lithium developer Patriot Battery Metals.