Polypore expects weak second half as customers delay orders
(Reuters) - Filtration products maker Polypore International Inc (PPO.N) said it expects profit for the second half of the year to be similar or slightly below the first half as weak demand in July and August led to delays in customer orders.
Investors have recently been concerned about the impact of General Motors Co (GM.N) plans to temporarily halt production of Chevrolet Volt starting mid September. The car uses Polypore's lithium battery separators.
Polypore said it expects adjusted earnings for the third quarter to be in range of the low- to mid-30-cents per share. Analysts' expected the company to earn 50 cents per share, according to Thomson Reuters I/B/E/S.
Polypore said customers delayed certain orders to the next quarter. September sales rebound somewhat and the company expects fourth quarter profit to improve sequentially.
But the company's fourth quarter adjusted earnings forecast range of low-50-cents to low-60-cents per share came in largely below analysts' estimates of 62 cents per share.
"Whether they come in at the low 50s range or they come in the low 60s range is going to be a function of how production ramps up in the electric drive vehicles and one of the them is clearly the Volt," said analyst Richard Eastman with Robert W. Baird.
Stifel Nicolaus analyst Jeff Osborne said it was apparent that automakers were continuing to take a slow approach to their all-electric vehicle launches.
Analyst Eastman said the fourth quarter was also dependent on Nissan Motor Co Ltd's (7201.T) battery plant startups in the United States and the UK. Nissan's Leaf electric vehicle also uses Polypore's separators.
Polypore makes filtration and separation products that are used in lithium and lead-acid batteries, and haemodialysis, blood oxygenation and other microfiltration applications.
Shares of the Charlotte, North Carolina-based company, which has a market value of about $1.67 billion, were trading down 2 percent at $35.18 on the New York Stock Exchange in late morning trade on Tuesday. They had fallen as much as 10 percent earlier in the session.
(Reporting by Megha Mandavia in Bangalore; Editing by Supriya Kurane)