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By Brian Nelson, CFA
Albemarle Corp (ALB) recently reported fourth quarter results that were mixed. Revenue beat expectations, but non-GAAP earnings per share came up a bit short. Fourth quarter net sales were $1.4 billion, up 16%, led by gains in all of its segments. Adjusted EBITDA in the quarter of $269 million was up 7% led by Energy Storage and Ketjen. Albemarle posted an adjusted diluted loss per share of ($0.53).
Management had the following to say about the results:
Our results for the fourth quarter and full year 2025 are a testament to our team’s focus on execution amid dynamic market conditions. Albemarle achieved year-over-year sales growth of more than 15% in the fourth quarter, as well as strong full-year cash flow generation and significant cost and productivity improvements. The steps we have taken to optimize our asset portfolio, reduce costs and strengthen our financial flexibility have improved our competitive position. Even as market conditions improve, we continue to drive cost reduction and productivity actions to enable long-term growth, powered by our world-class resources.
Full year cash flow from operations was $1.3 billion, representing more than 100% operating cash flow conversion thanks in part to cost and productivity improvements, working capital management, and a customer pre-payment. Free cash flow of $692 million reflected strong operating cash flow and significantly lower capital expenditures of $590 million, down 65% year-over-year.
Looking to 2026, management highlighted improved lithium market conditions and operational performance across various scenarios, and noted that capital expenditures will be roughly flat, translating into strong free cash flow. Using the January 2026 average lithium price of ~$20/kg LCE, net sales are expected to be between $5.7-$6.0 billion and adjusted EBITDA is expected in the range of $2.4-$2.6 billion for the year. Shares of Albemarle are up over 220% during the past 12 months, and we continue to like shares in the ESG Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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