Page 1

                                                             Page 1 of 23 Pages


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                    For Quarterly Period Ended March 31, 2002

                                       OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For Transition Period from ________ to ___________

Commission File Number 1-12658

                              ALBEMARLE CORPORATION
              -----------------------------------------------------
              (Exact name of registrant as specified in its charter

           VIRGINIA                                            54-1692118
-------------------------------                         -----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                             Identification No.)

330 SOUTH FOURTH STREET
P. O. BOX 1335
RICHMOND, VIRGINIA                                                23210
--------------------                                             -------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code - (804) 788-6000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes   X                  No

Number of shares of common stock, $.01 par value, outstanding as of April 30,
2002: 41,610,716

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                              ALBEMARLE CORPORATION

                                    I N D E X

                                                                       Page
                                                                      Number
                                                                      ------

PART I.    FINANCIAL INFORMATION

  ITEM 1.  Financial Statements

           Consolidated Balance Sheets - March 31, 2002
           and December 31, 2001                                         3-4

           Consolidated Statements of Income - Three
           Months Ended March 31, 2002 and 2001                          5

           Consolidated Statements of Comprehensive Income - Three
           Months Ended March 31, 2002 and 2001                          6

           Condensed Consolidated Statements of Cash Flows -
           Three Months Ended March 31, 2002 and 2001                    7

           Notes to the Consolidated Financial Statements                8-14

  ITEM 2.  Management's Discussion and Analysis of Results
           of Operations and Financial Condition, and Additional
           Information                                                   15-21

  ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk    21

PART II.   OTHER INFORMATION

  ITEM 1.  Legal Proceedings                                             21

  ITEM 4.  Submission of Matters to a Vote of Security Holders           22

  ITEM 6.  Exhibits and Reports on Form 8-K                              22

SIGNATURES                                                               23




 Page 3


      PART I - FINANCIAL INFORMATION
      ------------------------------

         ITEM 1.  Financial Statements
                 ----------------------


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                             (Dollars In Thousands)
                             ----------------------



                                                     March 31,      December 31,
                                                       2002             2001
                                                    -----------     ------------
                                                   (Unaudited)
                                                                
ASSETS

Current assets:
  Cash and cash equivalents                         $   29,498        $  30,585
  Accounts receivable, less allowance for doubtful
    accounts (2002 - $1,910;  2001 - $4,193)           171,626          175,160
  Inventories:
    Finished goods                                     121,804          114,337
    Raw materials                                       18,809           19,551
    Stores, supplies and other                          25,222           25,773
                                                   ------------      -----------
                                                       165,835          159,661
  Deferred income taxes and prepaid expenses            17,378           18,255
                                                   ------------      -----------
    Total current assets                               384,337          383,661
                                                   ------------      -----------
Property, plant and equipment, at cost               1,434,971        1,425,203
  Less accumulated depreciation and amortization       911,669          895,531
                                                   ------------      -----------
    Net property, plant and equipment                  523,302          529,672

Prepaid pension assets                                 131,510          128,195
Other assets and deferred charges                       59,047           56,199
Goodwill                                                27,488           26,704
Other intangibles, net of amortization                   5,226            5,044
                                                   ------------      -----------
Total assets                                        $1,130,910       $1,129,475
                                                   ============      ===========




         See accompanying notes to the consolidated financial statements.


 Page 4


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                             (Dollars In Thousands)
                             ----------------------



                                                     March 31,      December 31,
                                                       2002             2001
                                                   ------------     ------------
                                                    (Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
                                                                
  Accounts payable                                  $   65,619        $  63,559
  Long-term debt, current portion                      227,051          157,862
  Accrued expenses                                      60,096           59,978
  Dividends payable                                      5,404            5,915
  Income taxes payable                                  19,907           16,523
                                                    -----------      -----------
      Total current liabilities                        378,077          303,837
                                                    -----------      -----------
Long-term debt                                          12,060           12,353
Other noncurrent liabilities                           127,910          120,269
Deferred income taxes                                  100,961           99,714
Shareholders' equity:
  Common stock, $.01 par value, issued and outstanding-
    41,546,341 in 2002 and 45,498,201 in 2001              415              455
  Additional paid-in capital                               171           51,025
  Accumulated other comprehensive loss                 (19,377)         (18,453)
  Retained earnings                                    530,693          560,275
                                                    -----------      -----------
      Total shareholders' equity                       511,902          593,302
                                                    -----------      -----------
Total liabilities and shareholders' equity          $1,130,910       $1,129,475
                                                    ===========      ===========






        See accompanying notes to the consolidated financial statements.

 Page 5


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
                     (In Thousands Except Per-Share Amounts)
                     ---------------------------------------
                                   (Unaudited)



                                                        Three Months Ended
                                                             March 31,
                                                  ------------------------------
                                                    2002                 2001
                                                  --------             --------
                                                                 
Net sales                                         $224,628             $224,410
Cost of goods sold                                 168,868              164,955
                                                  --------             --------
   Gross profit                                     55,760               59,455

Selling, general and administrative expenses        25,704               22,704
Research and development expenses                    4,776                5,777
Special item                                           850                    -
                                                  --------             --------
   Operating profit                                 24,430               30,974
Interest and financing expenses                     (1,225)              (1,069)
Other income, net                                      792                1,582
                                                  --------             --------
Income before income taxes                          23,997               31,487
Income taxes                                         7,199                8,942
                                                  --------             --------
Net income                                        $ 16,798             $ 22,545
                                                  ========             ========
Basic earnings per share                          $   0.39             $   0.49
                                                  ========             ========
Diluted earnings per share                        $   0.38             $   0.48
                                                  ========             ========
Cash dividends declared per
  share of common stock                           $   0.13             $   0.26
                                                  ========             ========




        See accompanying notes to the consolidated financial statements.

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                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------
                             (Dollars In Thousands)
                             ----------------------
                                   (Unaudited)



                                                        Three Months Ended
                                                             March 31,
                                                  ------------------------------
                                                    2002                  2001
                                                  ---------            ---------
                                                                  
Net income                                         $16,798              $22,545
Other comprehensive gain (loss),
  net of tax:
  Unrealized gain (loss) on securities
    available for sale                                  27                 (271)
  Foreign currency translation
    adjustments                                       (951)              (3,801)
                                                  ---------            ---------
Other comprehensive loss                              (924)              (4,072)
                                                  ---------            ---------
Comprehensive income                               $15,874              $18,473
                                                  =========            =========






        See accompanying notes to the consolidated financial statements.


 Page 7


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                             (Dollars In Thousands)
                             ----------------------
                                   (Unaudited)



                                                                            Three Months Ended
                                                                                 March 31,
                                                                       ----------------------------
                                                                          2002               2001
                                                                       ---------          ---------

                                                                                    
Cash and cash equivalents at beginning of year                         $ 30,585           $ 19,300
                                                                       ---------          ---------
Cash flows from operating activities:
  Net income                                                             16,798             22,545
  Adjustments to reconcile net income to cash flows from
    operating activities:
     Depreciation and amortization                                       20,269             18,445
     Working capital increase (decrease) excluding cash
      and cash equivalents                                                1,057             (8,759)
  Other, net                                                             (4,452)              (795)
                                                                       ---------          ---------
   Net cash provided from operating activities                           33,672             31,436
                                                                       ---------          ---------

Cash flows from investing activities:
  Capital expenditures                                                   (8,182)           (14,469)
  Investments in joint ventures and nonmarketable securities             (1,277)            (6,143)
  Restricted cash from industrial revenue bond proceeds                   1,741                  -
  Other, net                                                              1,872                 22
                                                                       ---------          ---------
   Net cash used in investing activities                                 (5,846)           (20,590)
                                                                       ---------          ---------
Cash flows from financing activities:
  Proceeds from borrowings                                              100,099                  -
  Repayments of long-term debt                                          (31,164)            (9,216)
  Dividends paid                                                         (5,918)            (5,956)
  Purchases of common stock                                             (92,943)                 -
  Proceeds from exercise of stock options                                   445                591
                                                                       ---------          ---------
   Net cash used in financing activities                                (29,481)           (14,581)
                                                                       ---------          ---------
Net effect of foreign exchange on cash and cash equivalents                 568             (1,000)
                                                                       ---------          ---------
Net decrease in cash and cash equivalents                                (1,087)            (4,735)
                                                                       ---------          ---------
Cash and cash equivalents at end of period                             $ 29,498           $ 14,565
                                                                       =========          =========



         See accompanying notes to the consolidated financial statements

 Page 8




                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

 1.  In the  opinion of  management,  the  accompanying  consolidated  financial
     statements of Albemarle  Corporation and Subsidiaries  ("Albemarle" or "the
     Company") contain all adjustments necessary for a fair presentation, in all
     material respects, of the Company's  consolidated  financial position as of
     March 31,  2002,  and  December  31,  2001,  the  consolidated  results  of
     operations and comprehensive income for the three-month periods ended March
     31,  2002,  and  2001,  and  condensed  consolidated  cash  flows  for  the
     three-month  periods ended March 31, 2002, and 2001. All adjustments are of
     a normal and recurring  nature.  These  consolidated  financial  statements
     should be read in conjunction  with the consolidated  financial  statements
     and notes thereto  included in the Company's 2001 Annual Report & Form 10-K
     filed on February 27, 2002.  The  December  31, 2001  consolidated  balance
     sheet data was derived  from  audited  financial  statements,  but does not
     include  all  disclosures   required  by  generally   accepted   accounting
     principles.  The results of  operations  for the  three-month  period ended
     March  31,  2002,  are not  necessarily  indicative  of the  results  to be
     expected for the full year.

2.   Long-term debt consists of the following:

                                             March 31,              December 31,
                                               2002                     2001
                                           ------------             ------------
     Variable-rate bank loans                 $213,940                 $144,600
     Foreign borrowings                         13,174                   13,584
     Industrial revenue bonds                   11,000                   11,000
     Miscellaneous                                 997                    1,031
                                           ------------             ------------
       Total                                   239,111                  170,215
     Less amounts due within one year          227,051                  157,862
                                           ------------             ------------
       Long-term debt                         $ 12,060                 $ 12,353
                                           ============             ============



     The  Company's   Competitive   Advance  and  Revolving  Facility  Agreement
     ("Revolving   Credit   Agreement")  will  mature  on  September  29,  2002.
     Accordingly,  the  balance  outstanding  thereunder  is included in current
     liabilities.   The  Company  anticipates  entering  into  a  new  long-term
     agreement in the coming months.

 3.  Cost of goods sold includes foreign exchange  transaction gains (losses) of
     $791 and  ($502)  for the  three-months  ended  March  31,  2002 and  2001,
     respectively.



 Page 9


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)



 4.  Basic and diluted  earnings  per share for the  three-month  periods  ended
     March 31, 2002 and 2001, are calculated as follows:


                                                          Three Months Ended
                                                               March 31,
                                                     ---------------------------
Basic earnings per share                               2002               2001
------------------------                             --------           --------
Numerator:
  Income available to stockholders, as reported      $16,798            $22,545
                                                     --------           --------
Denominator:
  Average number of shares of common stock
    outstanding                                       43,438             45,838
                                                     --------           --------
Basic earnings per share                             $  0.39            $  0.49
                                                     ========           ========

Diluted earnings per share
--------------------------
Numerator:
  Income available to stockholders, as reported      $16,798            $22,545
                                                     --------           --------
Denominator:
  Average number of shares of common stock
    outstanding                                       43,438             45,838
  Shares issuable upon exercise of stock
    options and other common stock equivalents           752                848
                                                     --------           --------
      Total shares                                    44,190             46,686
                                                     --------           --------
Diluted earnings per share                           $  0.38            $  0.48
                                                     ========           ========

 5.  Cash  dividends  declared for the  three-month  period ended March 31, 2001
     totaled  $0.26 per  share  which  included  a  dividend  of $0.13 per share
     declared on February 28, 2001, payable April 1, 2001, as well as a dividend
     of $0.13 per share declared March 28, 2001, payable July 1, 2001.


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                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

 6.  The significant  differences  between the U.S. Federal statutory income tax
     rate on pretax income and the effective income tax rate for the three-month
     periods ended March 31, 2002 and 2001, respectively, are as follows:

                                        % of Income Before Income Taxes
                                       ---------------------------------
                                          Three Months Ended March 31,
                                       ---------------------------------
                                             2002              2001
                                           --------         ---------
Federal statutory rate                       35.0%             35.0%
Foreign sales corporation benefit            (2.4)             (2.5)
State taxes, net of federal tax benefit       1.0               1.0
Depletion                                    (1.9)             (1.4)
Reversal of valuation allowance                 -              (3.3)
Other                                        (1.7)             (0.4)
                                           ---------        ---------
Effective income tax rate                    30.0%             28.4%
                                           =========        =========

     During  the  first  quarter  of 2001,  the  Company  released  a  valuation
     allowance  that had been  required on a deferred  tax asset  related to the
     Company's facilities in Louvain-la-Neuve, Belgium, which was established in
     1996 when the Company's Olefins Business was sold.

 7.  On May 31, 2001, the Company, through its wholly-owned subsidiary Albemarle
     Deutschland GmbH,  acquired  Martinswerk GmbH for approximately  $34,000 in
     cash plus expenses and the assumption of  approximately  $64,000 in current
     and  long-term  liabilities.  The assets  acquired  included  Martinswerk's
     manufacturing  facilities  and  headquarters  in Bergheim,  Germany and its
     50-percent stake in Magnifin Magnesiaprodukte GmbH, which has manufacturing
     facilities at St. Jakobs Breitenau,  Austria.  The acquisition was financed
     through the Company's existing Revolving Credit Agreement.  The acquisition
     is  being  accounted  for  by  the  purchase  method  of  accounting,   and
     accordingly,  the  operating  results have been  included in the  Company's
     consolidated  results of operations from the date of  acquisition.  See pro
     forma financial  information presented below. The purchase price allocation
     is still open at March 31, 2002, pending the Company's final  determination
     of an accrual  related to the valuation and the number of  participants  of
     the Company's  liability for a planned workforce reduction in Germany which
     will be finalized by May 31, 2002. Martinswerk produces mineral-based flame
     retardants for the plastics and rubber  markets,  brightening  pigments for
     high-quality   paper   applications  and  specialty   aluminum  oxides  for
     polishing,  catalyst  and niche  ceramic  applications.  Magnifin  produces
     high-purity   magnesium   hydroxide  flame   retardant   products  used  in
     applications requiring higher processing temperatures.

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                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

     On July 1,  2001,  the  Company  acquired  the  custom  and fine  chemicals
     businesses of ChemFirst Inc. for  approximately  $79,000 in cash,  plus the
     assumption of certain current  liabilities and expenses associated with the
     acquisition.  The acquisition was financed  through the Company's  existing
     Revolving  Credit  Agreement.  The Asset  Purchase  Agreement  provides for
     additional  contingent  payments to ChemFirst Inc. which are dependant upon
     the contribution  margin of certain products and are not expected to exceed
     $10,000.  Additional  payments,  if any, will be recorded as goodwill.  The
     acquisition  is being  accounted for by the purchase  method of accounting,
     and accordingly,  the operating results have been included in the Company's
     consolidated  results of operations from the date of  acquisition.  See pro
     forma financial  information presented below. The purchase price allocation
     valuation,  excluding the effects of additional  contingent  consideration,
     has been included in the March 31, 2002 financial statements based upon the
     use of certain  estimates.  The assets acquired  included  working capital,
     property,  plant and equipment and certain intangibles,  including goodwill
     and  technical  know how. The purchase  price  allocation  is still open at
     March 31, 2002, pending the Company's receipt and reconciliation of certain
     inventory  information  from  ChemFirst  Inc.  We  expect to  finalize  the
     purchase price  allocation in the second quarter of 2002.  Albemarle's  new
     businesses  focus  on  the  manufacture  of  custom  and  proprietary  fine
     chemicals and chemical  services for the  pharmaceutical  and life sciences
     industries. They also include additives for ultraviolet light-cured polymer
     coatings,  which  should  broaden  the  portfolio  of  Albemarle's  polymer
     chemicals business.  Included is a multi-functional  manufacturing plant in
     Tyrone,  Pennsylvania,  and a cGMP (current Good  Manufacturing  Practices)
     pilot plant in Dayton, Ohio.

     Pro forma  information is presented as follows for the  three-month  period
     ended March 31,  2001,  prior to the  finalization  of the  purchase  price
     allocations,  as if Martinswerk GmbH and Martinswerk's  50-percent stake in
     Magnifin   Magnesiaprodukte   GmbH,  and  the  custom  and  fine  chemicals
     businesses of ChemFirst Inc.,  which were acquired on May 31, 2001 and July
     1, 2001, respectively, had been acquired on January 1, 2001.

                                            Three Months Ended
                                               March 31, 2001
                                         ------------------------

        Net sales                                  $265,591
                                                =============
        Net income                                  $24,736
                                                =============
        Basic earnings per share                      $0.54
                                                =============
        Diluted earnings per share                    $0.53
                                                =============

     The pro forma information  presented above primarily  includes  adjustments
     for interest expense, depreciation expense and amortization of intangibles.

 Page 12

                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


 8.  On February  13,  2002,  the Company  completed  the  purchase of 4,000,000
     shares of its common stock from Bruce C. Gottwald and his related immediate
     family interests for an aggregate price of $92,680.  The Company's purchase
     price was 25 cents per share less than the weighted  average  trading price
     from New York Stock Exchange  transactions in Albemarle common stock during
     the 10  business  days'  period  beginning  with  the  third  business  day
     following the announcement of Albemarle's 2001 year-end earnings.

 9.  During the first  quarter of 2002,  the  Company  continued  its efforts to
     reduce  operating  costs  through an  involuntary  separation  program that
     resulted in a special charge of $850 ($541 after income taxes or 1 cent per
     share on a diluted  basis).  The  program  impacted a total of 12  salaried
     employees  throughout the Company. The following table summarizes the total
     liability assumed related to the involuntary separation program:

                                       Three Months Ended
                                         March 31, 2002
                                       ------------------

         Total 2002 workforce
         reduction charge                         $1,114

         Less: over accrual from
         prior year accruals                         264
                                       ------------------

         Net workforce reduction
         charge for 2002                           $ 850
                                       ==================

     Approximately  $733 of the total  2002 work force  accrual  was paid in the
     first quarter. In addition, essentially all of the fourth quarter 2001 work
     force accrual was paid during the first quarter of 2002.

 10. During the first quarter ended March 31, 2002,  the Company  recorded a net
     charge  of  $2,000  ($1,274  after  income  taxes or 3 cents per share on a
     diluted  basis) to costs of sales  that  related to the  discontinuance  of
     product support for and the withdrawal from a water treatment venture.  The
     Company's balance sheet at March 31, 2002,  included entries reflecting the
     accrual  of a probable  insurance  recovery  of $3,700 in other  assets and
     deferred  charges and accruals  totaling  $5,700 in current and  noncurrent
     liabilities.

 11. The Company has recorded environmental liabilities of approximately $29,970
     and $30,245 at March 31, 2002 and December 31,  2001,  respectively,  which
     represents  management's best estimate of the Company's future  remediation
     and other anticipated  environmental costs relating to past operations.  We
     believe that such estimate is reasonable based on available information and
     that the  liabilities  and  related  loss  contingencies  and the  expected
     outcome of  uncertainties  have been adequately  described in the Company's
     consolidated financial

 Page 13


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

     statements  at December 31, 2001.  Although it is difficult to quantify the
     potential  financial  impact of compliance  with  environmental  protection
     laws, management estimates, based on the latest available information, that
     there is a reasonable  possibility  that future  environmental  remediation
     costs associated with the Company's past  operations,  in excess of amounts
     already  recorded,  could  be up to  $10,000  before  income  taxes,  to be
     incurred over a period of time. However,  the Company believes that any sum
     it may be  required to pay in  connection  with  environmental  remediation
     matters in excess of the  amounts  recorded  should  occur over a period of
     time and  should  not  have a  material  adverse  impact  on its  financial
     condition  or results  of  operations,  but could  have a material  adverse
     impact in a particular quarterly reporting period.

 12. The  Company  is a  global  manufacturer  of  specialty  polymer  and  fine
     chemicals, currently grouped into two operating segments: Polymer Chemicals
     and  Fine  Chemicals.  The  operating  segments  were  determined  based on
     management  responsibility.  The Polymer Chemicals segment is comprised of
     flame retardants,  organometallics and catalysts, and polymer additives and
     intermediates.  The Fine  Chemicals  operating  segment  is  comprised  of
     agrichemicals and pharmachemicals, performance chemicals and fine chemistry
     services.  Segment data includes intersegment transfers of raw materials at
     cost and  foreign  exchange  gains and  losses as well as  allocations  for
     certain  corporate  costs. The corporate and other expenses include certain
     corporate-related items not allocated to the reportable segments.




                                                       Three Months Ended March 31,
                                  ----------------------------------------------------------------------
                                             2002                                       2001
                                  -----------------------------            -----------------------------
Summary of Segment Results         Revenues            Income               Revenues             Income
                                  ----------          ---------            ----------           --------
                                                                                   
Polymer Chemicals                  $116,463            $11,729              $120,956           $ 20,858
Fine Chemicals                      108,165             16,503               103,454             14,892
                                  ----------          ---------            ----------          ---------
   Segment totals                  $224,628             28,232              $224,410             35,750
                                  ==========                               ==========
Corporate and other expenses                            (3,802)                                  (4,776)
                                                      ---------                                ---------
   Operating profit                                     24,430                                   30,974
Interest and financing expenses                         (1,225)                                  (1,069)
Other income, net                                          792                                    1,582
                                                      ---------                                ---------
Income before income taxes                            $ 23,997                                 $ 31,487
                                                      =========                                =========


 Page 14


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

 13. During July 2001, the Financial  Accounting Standards Board ("FASB") issued
     Statement of Financial  Accounting Standard ("SFAS") No. 142, "Goodwill and
     Other  Intangible  Assets." SFAS No. 142  eliminates  the  amortization  of
     goodwill and instead requires a periodic review of any goodwill balance for
     possible impairment.  SFAS No. 142 also requires that goodwill be allocated
     at the  reporting  unit  level.  This  statement  was  effective  for years
     beginning  after  December  15,  2001,  with the  exception of goodwill and
     intangible  assets  acquired  after  June  30,  2001,  which  were  subject
     immediately  to the  nonamortization  and  amortization  provisions  of the
     statement.  For  financial  reporting  purposes,  the Company  discontinued
     amortization  of  goodwill  as of January 1, 2002,  with the  exception  of
     goodwill  associated  with the acquisition of the custom and fine chemicals
     businesses of ChemFirst Inc., and is in compliance with periodic impairment
     test  procedures.  The  Company has  completed  its  transitional  goodwill
     impairment  testing and has  determined  that  goodwill is not  impaired at
     January 1, 2002.

     The following  schedule  presents net income,  basic earnings per share and
     diluted  earnings per share,  exclusive of goodwill  amortization  expense,
     including any related tax effects,  for all periods  presented in which the
     standard had not been adopted.

                                                 Three Months Ended
                                                   March 31, 2001
                                                ---------------------

Reported net income                                          $22,545
Add back: goodwill amortization, net of tax                      281
                                                ---------------------
Adjusted net income                                          $22,826
                                                =====================

Basic earnings per share:
  Reported net income                                          $0.49
  Goodwill amortization, net of tax                             0.01
                                                ---------------------
  Adjusted net income                                          $0.50
                                                =====================

Diluted earnings per share:
  Reported net income                                          $0.48
  Goodwill amortization, net of tax                             0.01
                                                ---------------------
  Adjusted net income                                          $0.49
                                                =====================



     During  October  2001,  the FASB issued SFAS No. 144,  "Accounting  for the
     Impairment or Disposal of Long-Lived  Assets,"  which  addresses  financial
     accounting  and  reporting  for the  impairment  or disposal of  long-lived
     assets. The Company adopted SFAS No. 144 on January 1, 2002. This Statement
     has not had an impact on the Company's financial statements as of March 31,
     2002.

 Page 15


         ITEM 2. Management's Discussion and Analysis of Results of Operations
                --------------------------------------------------------------
                 and Financial Condition and Additional Information
                ---------------------------------------------------

     The  following  is   management's   discussion   and  analysis  of  certain
     significant  factors  affecting  the  results of  operations  of  Albemarle
     Corporation  ("Albemarle" or "the Company")  during the periods included in
     the  accompanying  consolidated  statements  of income  and  changes in the
     Company's  financial  condition  since  December  31,  2001.

     Some  of  the  information   presented  in  the  following  discussion  may
     constitute  forward-looking  comments  within the  meaning  of the  Private
     Securities Litigation Reform Act of 1995. Although the Company believes its
     expectations are based on reasonable  assumptions  within the bounds of its
     knowledge of its business and  operations,  there can be no assurance  that
     actual results will not differ  materially from its  expectations.  Factors
     that could  cause  actual  results  to differ  from  expectations  include,
     without limitation,  the timing of orders received from customers, the gain
     or loss of significant  customers,  competition  from other  manufacturers,
     changes in the demand for the Company's products,  increases in the cost of
     the  products,  changes in the market in general,  fluctuations  in foreign
     currencies and significant changes in new product introduction resulting in
     an increase in capital project requests and approvals leading to additional
     capital spending.

     Results of Operations
     ---------------------
     First Quarter 2002 Compared with First Quarter 2001
     ---------------------------------------------------

     Net sales for first  quarter  2002 of $224.6  million  were about even with
     first  quarter  2001 net sales of  $224.4  million  primarily  due to $35.6
     million in first quarter net sales from the mid-year 2001  acquisitions  of
     Martinswerk GmbH and the custom and fine chemicals  businesses of ChemFirst
     Inc.  offset,  in part,  by lower  shipments  and  selling  prices in flame
     retardants  ($14.1  million),  catalysts and additives  ($7.6  million) and
     agrichemicals  ($4.9  million),  lower  selling  prices  and  shipments  in
     performance chemicals ($6.7 million) and lower shipments in pharmachemicals
     ($2.2 million).

     The gross profit margin decreased to 24.8% in first quarter 2002 from 26.5%
     for the  corresponding  period in 2001. First quarter 2002 operating profit
     was down 21.1% or $6.5 million from first  quarter  2001  operating  profit
     primarily due to lower shipments and selling prices in flame retardants and
     catalyst and additives and the net unfavorable  effects of foreign exchange
     offset,  in part,  by  favorable  raw  material  and  energy  costs and the
     favorable net effects of the mid-year 2001 acquisitions. First quarter 2002
     operating profit also includes a charge of $2.0 million ($5.7 million,  net
     of a probable  insurance  recovery of $3.7  million) to costs of sales that
     related to the  discontinuance  of product  support for and the  withdrawal
     from a  water  treatment  venture  as  well as a $0.9  million  charge  for
     workforce  reductions as the Company  continues to aggressively  pursue its
     cost reduction efforts.

     Selling,  general and  administrative  expenses  ("SG&A")  and research and
     development  expenses ("R&D"),  increased 7.0% or $2.0 million in the first
     quarter of 2002 versus  first  quarter 2001  primarily  due to SG&A and R&D
     costs related to the businesses  acquired in 2001 ($3.2 million) offset, in
     part,  by the benefits of cost  reduction  efforts  initiated in 2001. As a
     percentage of net sales, selling,  general and administrative expenses, and
     research and

 Page 16

     development expenses, were 13.6% in 2002 versus 12.7% in the 2001 quarter.

     OPERATING SEGMENTS
     Net sales by reportable  business  operating  segment for the first quarter
     periods ended March 31, 2002 and 2001 are as follows:

                                           Net Sales
                                        (In Thousands)
                                ------------------------------

                                    2002               2001
                                -----------        -----------
     Polymer Chemicals            $116,463           $120,956
     Fine Chemicals                108,165            103,454
                                -----------        -----------
     Segment totals               $224,628           $224,410
                                ===========        ===========

     Polymer Chemicals' net sales for first quarter 2002 decreased 3.7%, or $4.5
     million,  from  first  quarter  2001  net  sales,  primarily  due to  lower
     shipments and pricing of flame retardants ($14.1 million) and catalysts and
     additives  ($7.6  million),  which includes the  unfavorable net effects of
     foreign  exchange  ($2.4  million)  offset,  in part, by net sales of $17.1
     million from the May 31, 2001 acquisition of Martinswerk GmbH.

     Fine  Chemicals'  net sales for first quarter 2002  increased  4.6% or $4.7
     million from first quarter 2001 primarily due to net sales of $18.5 million
     from the mid-year 2001  acquisitions of Martinswerk GmbH and the custom and
     fine  chemicals  businesses  of ChemFirst  Inc.  offset,  in part, by lower
     pricing and shipments in performance  chemicals ($6.7  million),  and lower
     shipments and pricing in agrichemicals  ($4.9 million) and  pharmachemicals
     ($2.2  million),  which  includes  the  unfavorable  net effects of foreign
     exchange ($1.5 million).

     Operating  profit by reportable  business  operating  segment for the first
     quarter periods ended March 31, 2002, and 2001 are as follows:

                                             Operating Profit
                                              (In Thousands)
                                  -----------------------------------
                                       2002                  2001
                                  --------------       --------------
     Polymer Chemicals                $11,729              $20,858
     Fine Chemicals                    16,503               14,892
                                  --------------       --------------

     Segment totals                    28,232               35,750
     Corporate and other expenses      (3,802)              (4,776)
                                  --------------     ----------------

     Operating profit                 $24,430              $30,974
                                  ==============     ================

     Polymer  Chemicals'  first quarter 2002 segment  operating  profit was down
     43.8% or $9.1 million from first quarter 2001  primarily due to lower sales
     volumes ($5.0 million),  net of the favorable  effects of the mid-year 2001
     acquisition  of  Martinswerk  GmbH  and  sales  prices  ($4.3  million),  a
     reclassification  of bad debt  expense  for an account  written  off to the
     corporate allowance for doubtful accounts from corporate and other expenses
     ($2.0 million) and the net  unfavorable  effects of foreign  exchange ($2.0
     million) offset, in part, by favorable raw material costs ($4.6 million).

 Page 17

     Fine Chemicals' first quarter 2002 segment operating profit increased 10.8%
     or $1.6 million from first quarter 2001  primarily  due to favorable  plant
     utilization and production  costs ($7.5 million) and favorable raw material
     costs ($4.9 million) offset,  in part, by lower sales prices ($4.6 million)
     and volumes ($3.6 million) and a charge of $2.0 million ($5.7 million,  net
     of a probable  insurance  recovery  of $3.7  million)  that  related to the
     discontinuance  of  product  support  for and the  withdrawal  from a water
     treatment venture.

     Corporate and other expenses for the first quarter of 2002 were down 20.4%,
     or  $1.0   million,   from  first   quarter   2001   primarily   due  to  a
     reclassification  of bad debt expense to Polymer  Chemicals  ($2.0 million)
     offset,  in part, by a first quarter 2001 workforce  reduction charge ($0.9
     million).

     INTEREST AND FINANCING EXPENSES
     Interest and  financing  expenses for first  quarter  2002  increased  $0.1
     million  from $1.1  million  in first  quarter 2001.

     OTHER INCOME, NET
     Other income, net for the first quarter 2002 amounted to $0.8 million, down
     $0.8 million from the corresponding period in 2001.

     INCOME TAXES
     Income taxes for first quarter 2002 were lower  compared to the same period
     in 2001  primarily  due to lower  income  before  taxes in 2002.  The first
     quarter 2002  effective  income tax rate was 30.0%,  up from 28.4% in first
     quarter  2001.  During the first  quarter of 2001,  the Company  released a
     valuation  allowance that had been required on a deferred tax asset related
     to  the  Company's  facilities  in  Louvain-la-Neuve,  Belgium,  which  was
     established in 1996 when the Company's Olefins Business was sold.


     Financial Condition and Liquidity
     ---------------------------------

     Cash  and  cash   equivalents  at  March  31,  2002,  were  $29.5  million,
     representing  a decrease  of $1.1  million  from $30.6  million at year-end
     2001.

     Cash flows  provided from operating  activities of $33.7 million,  together
     with  $100.1  million  of  proceeds  from  borrowings  primarily  from  the
     Company's  Competitive Advance and Revolving Facility Agreement ("Revolving
     Credit  Agreement") were used primarily to purchase 4,000,000 shares of the
     Company's common stock, to cover repayment of debt,  capital  expenditures,
     and payment of dividends.  The Company  anticipates that cash provided from
     operations in the future will be sufficient to pay its operating  expenses,
     satisfy debt-service obligations and make dividend payments.

     The  change in the  Company's  accumulated  other  comprehensive  loss from
     December 31, 2001, was primarily due to net foreign  currency  adjustments,
     net of related deferred taxes,  primarily  related to the  strengthening of
     the U.S. Dollar versus the Euro and the Japanese Yen.

 Page 18

     The  noncurrent  portion of the Company's  long-term debt amounted to $12.1
     million at March 31,  2002,  compared to $12.4  million at the end of 2001.
     The  Company's  long-term  debt,   including  the  current  portion,  as  a
     percentage of total capitalization amounted to 31.8% at March 31, 2002. The
     Company is guarantor of $11.8  million of  long-term  debt,  in the form of
     commitments,  on behalf of its  50-percent  owned  joint  venture  company,
     Jordan Bromine Company Limited. The Company's long-term debt, including the
     guarantee,  as a percent of total capitalization amounted to 32.9% at March
     31, 2002.

     The Company's Revolving Credit Agreement will mature on September 29, 2002.
     Accordingly,  the balance  outstanding  at March 31,  2002,  is included in
     current liabilities.  The Company anticipates entering into a new long-term
     agreement in the coming months based upon market conditions at the time the
     agreement is consummated.

     The Company's  capital  expenditures in the first three months of 2002 were
     lower than the same period of 2001. For the year capital  expenditures  are
     forecasted to be slightly lower than the 2001 level.  Capital spending will
     be financed  primarily with cash flow from  operations with additional cash
     needed,  if any,  to be  provided  from debt.  The amount and timing of any
     additional   borrowings   will  depend  on  the  Company's   specific  cash
     requirements.

     The Company is subject to federal,  state,  local and foreign  requirements
     regulating the handling,  manufacture  and use of materials  (some of which
     may  be  classified  as  hazardous  or  toxic  by one  or  more  regulatory
     agencies),  the  discharge  of  materials  into  the  environment  and  the
     protection of the environment.  To the Company's knowledge, it currently is
     complying, and expects to continue to comply, in all material respects with
     existing  environmental laws,  regulations,  statutes and ordinances.  Such
     compliance with federal, state, local and foreign environmental  protection
     laws is not expected to have in the future a material effect on earnings or
     the competitive position of Albemarle.

     Among  other  environmental  requirements,  the  Company  is subject to the
     federal  Superfund law, and similar state laws, under which the Company may
     be designated as a  potentially  responsible  party and may be liable for a
     share of the costs  associated  with  cleaning up various  hazardous  waste
     sites.

     Additional Information
     ----------------------

     Summary of Critical Accounting Policies:
     ----------------------------------------

     CONSOLIDATION
     The consolidated  financial  statements include the accounts and operations
     of  Albemarle  Corporation  and all of its  majority-owned  and  controlled
     subsidiaries.  The Company  applies  the equity  method of  accounting  for
     investments  between  20% and 50% owned  and the  Company  has  significant
     influence.  All  significant  intercompany  accounts and  transactions  are
     eliminated in consolidation.

     ESTIMATES AND  RECLASSIFICATIONS
     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions that affect the reported

 Page 19

     amounts of revenues,  expenses,  assets and  liabilities  and disclosure of
     contingent assets and liabilities at the date of the financial  statements.
     Actual results could differ from those estimates.

     REVENUE  RECOGNITION
     Sales revenue is recognized when (1) ownership and all rewards and risks of
     loss  have  been  transferred  to the  buyer,  (2) the  price is fixed  and
     determinable and (3)  collectibility  is reasonably  assured.  Revenue from
     services is recognized when costs of providing services are incurred.

     INVENTORIES
     Inventories are stated at the lower of cost or market, with cost determined
     on the last-in,  first-out  ("LIFO") basis for  substantially  all domestic
     inventories except stores and supplies,  and on either the weighted-average
     or first-in, first-out cost basis for other inventories.

     PROPERTY,  PLANT AND EQUIPMENT
     Accounts include costs of assets constructed or purchased, related delivery
     and  installation  costs  and  interest  incurred  on  significant  capital
     projects during their construction  periods.  Expenditures for renewals and
     betterments  also  are  capitalized,   but  expenditures  for  repairs  and
     maintenance are expensed as incurred. The cost and accumulated depreciation
     applicable  to  assets  retired  or sold are  removed  from the  respective
     accounts, and gains or losses thereon are included in income.  Depreciation
     is computed  primarily by the  straight-line  method based on the estimated
     useful lives of the assets.

     The Company evaluates historical and expected  undiscounted  operating cash
     flows of the related business segments or fair value of property, plant and
     equipment to determine the future recoverability of any property, plant and
     equipment recorded.  Recorded property,  plant and equipment is reevaluated
     on the  same  basis  at the  end of each  accounting  period  whenever  any
     significant  permanent  changes in business or circumstances  have occurred
     which might impair recovery.

     The costs of brine  wells,  leases  and  royalty  interests  are  primarily
     amortized  over the  estimated  average life of the well. On a yearly basis
     for all wells,  this  approximates a  unit-of-production  method based upon
     estimated reserves and production volumes.

     ENVIRONMENTAL  COMPLIANCE AND REMEDIATION
     Environmental  compliance  costs  include  the  cost of  purchasing  and/or
     constructing  assets to  prevent,  limit  and/or  control  pollution  or to
     monitor  the  environmental  status at various  locations.  These costs are
     capitalized and depreciated based on estimated useful lives.

     Environmental compliance costs also include maintenance and operating costs
     with  respect to  pollution  prevention  and control  facilities  and other
     administrative costs. Such operating costs are expensed as incurred.

     Environmental  remediation  costs of facilities used in current  operations
     are generally immaterial and are expensed as incurred.

 Page 20

     The   Company   accrues   for    environmental    remediation   costs   and
     post-remediation  costs on an undiscounted basis at facilities or off-plant
     disposal sites that relate to existing conditions caused by past operations
     in the accounting  period in which  responsibility  is established and when
     the  related  costs are  estimable.  In  developing  these cost  estimates,
     evaluation is given to currently  available facts regarding each site, with
     consideration  given to existing  technology,  presently  enacted  laws and
     regulations,  prior  experience in remediation of contaminated  sites,  the
     financial  capability of other  potentially  responsible  parties and other
     factors,  subject to  uncertainties  inherent  in the  estimation  process.
     Additionally,  these estimates are reviewed periodically,  with adjustments
     to the accruals recorded as necessary.

     PENSION  PLANS AND OTHER  POSTRETIREMENT  BENEFITS
     Annual costs of pension plans are determined actuarially based on Financial
     Accounting  Standards  Board  ("FASB")  Statement of  Financial  Accounting
     Standards ("SFAS") No. 87, "Employers'  Accounting for Pensions" ("SFAS No.
     87").  The  Company's  policy is to fund U.S.  pension plans at amounts not
     less  than the  minimum  requirements  of the  Employee  Retirement  Income
     Security Act of 1974 and generally for obligations  under its foreign plans
     to deposit  funds with trustees  and/or under  insurance  policies.  Annual
     costs of other  postretirement  plans are  accounted  for based on SFAS No.
     106,  "Employers'   Accounting  for  Postretirement   Benefits  Other  than
     Pensions."  The  policy of the  Company is to fund  post-retirement  health
     benefits for retirees on a pay-as-you-go basis.

     INCOME  TAXES
     The Company and its subsidiaries  file consolidated U.S. Federal income tax
     returns and individual foreign income tax returns.

     Deferred income taxes result from temporary  differences in the recognition
     of income and expenses for  financial  and income tax  reporting  purposes,
     using the  liability or balance sheet method.  Such  temporary  differences
     result primarily from differences  between the financial statement carrying
     amounts and tax basis of assets and liabilities  using enacted tax rates in
     effect in the years in which the differences are expected to reverse. It is
     the Company's  policy to record deferred income taxes on any  undistributed
     earnings  of  foreign  subsidiaries  that are not  deemed to be, or are not
     intended to be, permanently reinvested in those subsidiaries.


     Outlook
     -------

     In Polymer  Chemicals,  we hope the improvement in flame retardant  volumes
     that we have seen earlier this year will  continue.  We are  uncertain,  at
     this  point,  about  its  sustainability  because  we are  still  trying to
     validate  whether it is based on true  end-market  demand  strength  or the
     result of  inventory  buildup  in the  supply  chain.  We hope to have this
     sorted out by the middle of the year. We are, however,  seeing some erosion
     in  pricing,  primarily  in  some  of our  larger  volume  flame  retardant
     products,  brought on by excess capacity that resulted from the electronics
     industry slowdown. We continue to watch the polyolefins end markets closely
     in order to determine  when we can expect  strengthening  in our  customers
     demand for our catalysts and additives businesses.

 Page 21

     In Fine  Chemicals,  we anticipate a slightly weaker second quarter of 2002
     due to the  seasonality in our  agrichemicals  business,  but then stronger
     succeeding  quarters  such  that 2002  should  exceed  last year  operating
     profits.

     Overall, we believe our business will be essentially flat through the first
     half of this year followed by a period of gradual improvement as the
     polymer industry starts to recover.

     Additional  information  regarding the Company,  its products,  markets and
     financial  performance  is provided  at the  Company's  Internet  web site,
     www.Albemarle.com.


         ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
                 -----------------------------------------------------------
     There  have  been  no  significant  changes  in  our  interest  rate  risk,
     marketable  security  price  risk  or raw  material  price  risk  from  the
     information provided in our Form 10-K for the year ended December 31, 2001.

      Part II - OTHER INFORMATION
      ---------------------------

         ITEM 1. Legal Proceedings
                ------------------

     The Company and its  subsidiaries  are involved  from time to time in legal
     proceedings  of types  regarded  as  common  in the  Company's  businesses,
     particularly  administrative or judicial  proceedings  seeking  remediation
     under  environmental  laws,  such  as  Superfund,  and  products  liability
     litigation.

     While it is not  possible  to  predict  or  determine  the  outcome  of the
     proceedings  presently  pending,  in the Company's  opinion they should not
     result  ultimately in liabilities  likely to have a material adverse effect
     upon the results of  operations  or financial  condition of the Company and
     its subsidiaries on a consolidated basis.

 Page 22

         ITEM 4. Submission of Matters to a Vote of Security Holders
                 ---------------------------------------------------

     At the annual meeting of  shareholders  held on March 27, 2002,  there were
     41,535,476  shares of common stock  outstanding  and entitled to vote,  and
     37,901,755 were represented in person or by proxy. The voting  shareholders
     elected the directors  nominated in the Proxy  Statement with the following
     affirmative votes and votes withheld:

     Director                         Affirmative Votes          Votes Withheld
     ---------                        -----------------          --------------
     Craig R. Andersson                  37,229,678                  672,077
     Floyd D. Gottwald, Jr.              37,117,213                  784,542
     John D. Gottwald                    37,149,751                  752,004
     William M. Gottwald                 37,123,017                  778,738
     Richard L. Morrill                  37,224,721                  677,034
     Seymour S. Preston III              37,228,045                  673,710
     Paul F. Rocheleau                   37,220,437                  681,318
     Mark C. Rohr                        37,204,177                  697,578
     Charles E. Stewart                  37,151,695                  750,060
     Charles B. Walker                   37,208,274                  693,481
     Anne M. Whittemore                  37,225,684                  676,071

     The  shareholders  also approved the appointment of  PricewaterhouseCoopers
     LLP as the Company's  auditors for 2002 with 36,766,985  affirmative votes,
     1,069,845 negative votes and 64,925 abstentions.


         ITEM 6. Exhibits and Reports on Form 8-K
                 ---------------------------------

            (a) Exhibits - None

            (b) No reports on Form 8-K have been filed during the quarter for
                which this report is filed.


 Page 23



                                   SIGNATURES
                                   ----------

        Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
     the  registrant  has duly  caused this report to be signed on its behalf by
     the   undersigned   thereunto  duly   authorized.


                                      ALBEMARLE CORPORATION
                                      ---------------------
                                      (Registrant)




     Date:  May 8, 2002               By:  s/ Robert G. Kirchhoefer
                                          --------------------------

                                      Robert G. Kirchhoefer
                                      Treasurer and Chief Accounting Officer
                                      (Principal Accounting Officer)