Shares of Polypore International, Inc. (PPO) declined more than 7 percent in extended trades Wednesday after the battery technology company reported financial results for the first quarter that missed analysts' expectations. The company reported a 52 percent decline in profit for the first quarter on lower sales.
Sales of lead-acid battery separators in the first quarter grew 9 percent, while lithium battery separator sales decreased 42 percent from the year-ago quarter. Sales at the company's separations media segment edged up 1 percent in the quarter.
The Electronics and Electric Drive Vehicles or EDVs segment experienced very weak lithium battery separator demand in January and February, followed by marked improvement in March that continued into the second quarter.
The decrease in sales of lithium battery separators was primarily volume-related, reflecting weak demand in consumer electronics applications and EDVs early in the quarter, as well as customers reducing inventories associated with their fiscal year-ends.
Robert Toth, President and Chief Executive Officer of Polypore, said, "Our Separations Media and Transportation and Industrial segments, which represent the majority of Polypore, delivered solid performance in the quarter. Sales in the Electronics and EDVs segment were challenging, with added pressure from customers carefully managing inventory in what was - for many - their fourth fiscal quarter of the year."
The Charlotte, North Carolina-based technology filtration company's first-quarter net income was $9.0 million or $0.19 per share, down from $18.8 million or $0.40 per share in the year-ago quarter.
Excluding items, adjusted net income for the quarter was $12.9 million or $0.27 per share, compared to $22.3 million or $0.47 per share in the prior-year period. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 6 percent to $163.5 million from $173.7 million in the same period last year. Analysts had a consensus revenue estimate for the quarter of $175.90 million.
Looking ahead, Toth said, "The ramp-up of EDV battery and production facilities in the quarter - combined with new vehicle introductions and the improvement in order patterns experienced in March and April - give us confidence that sales of lithium battery separators will improve over the course of the year. We are also pleased that our strong cash position allowed us to pay down $25 million in debt, and we remain focused on creating shareholder value as our lithium business improves and as we drive growth."
PPO closed Wednesday's regular trading session at $41.21, down $0.42 or 1.01 percent on a volume of 358,276 shares. In after-hours, the stock further declined $3.21 or 7.79 percent to $38.00.
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