(Reuters) -Albemarle Corp, one of the world's biggest producers of lithium, raised its full-year forecasts on Wednesday after surpassing quarterly profit expectations on robust demand and higher prices for the metal used in electric-vehicle batteries.
The improved outlook also came in above market estimates and helped send the company's shares 16% higher in extended trading.
Lithium's central role in the production of electric-vehicle batteries has made it a coveted commodity as global efforts to decarbonize automobiles gather pace. That has pushed up prices of the metal to record highs in a boost for producers.
Albemarle (NYSE:ALB) said it expected its average realized lithium price to jump two-fold this year as demand continues to rise and supply remains tight.
The remarks echo comments from Tesla (NASDAQ:TSLA) Inc Chief Executive Elon Musk, who said last month that lithium supply was "a limiting factor" in the growth of EVs.
Albemarle said it now expected annual net sales between $5.2 billion and $5.6 billion, while analysts on average estimated a figure of $4.4 billion, according to Refinitiv IBES data.
The outlook is also underpinned by higher prices in the Charlotte, North Carolina-based company's bromine business.
Albemarle lifted its annual adjusted profit outlook to between $9.25 and $12.25 per share, from $5.65 to $6.65 per share. Analysts were expecting a figure of $6.22 per share.
In the three months ended March 31, the company earned an adjusted profit of $2.38 per share, smashing expectations of $1.63 per share.
Sales in Albemarle's lithium unit nearly doubled in the quarter to $550.3 million on the back of higher prices.