Executives at Charlotte-based battery parts manufacturer Polypore International sought to reassure investors Wednesday, after announcing results for the second half of the year will likely be weak.
Were disappointed, and performance was below our expectations, said chief executive Robert Toth, during a presentation to investors Wednesday. The company, along with its Celgard subsidiary, creates advanced membranes used in products ranging from batteries for electric automobiles and laptops to kidney dialysis. Polypore has production facilities in Charlotte and Concord.
But Toth and other executives said they expect demand for their products to continue growing as battery-powered and plug-in electric vehicles catch on, and consumer electronics demand remains strong.
You cant have too many batteries, Toth told investors. An investor said this, so I wont take credit, but its like an arms dealer having too many wars.
The company said that it expects earnings for the second half of the year, excluding certain items, to be similar or slightly below the first half of the year. Due to weak orders in July and August, Polypore said it expects earnings in the low- to mid-30-cent range, below Bloombergs consensus estimate of 49 cents a share.
Polypore earlier reported sales for the first half of the year were $359.5 million, down from $382 million in the first half of 2011. Profits fell to $39 million, down from $55 million in the same period last year.
General Motors also has shut down its Chevy Volt production plant for several weeks, twice this year, after poor sales. That has hurt demand for electric automobile batteries.
Celgards facilities in Concord have been touted as an example of successful local manufacturing. The company last year announced plans to invest $105 million to expand the Concord plant and add 250 jobs, aided by up to $2.3 million of state incentives.
Celgard also received $49 million in federal stimulus grants, as well as $18.6 million in state and local incentives, for a separate recent expansion that added 200 jobs in Charlotte and Concord.
Company officials also answered investors questions Wednesday about whether there is too much capacity in the battery industry. Toth said such concerns are overblown, and that new batteries produced will find homes in new, portable electronic devices. He also said stated production capacity by different companies is not realistic.
Stated capacity in this industry means absolutely nothing, he said. People say things that arent necessarily true.
Executives said they expect electric and hybrid vehicle demand to increase, as people become increasingly concerned with air pollution and the price of gasoline. And with $400 million worth of spending on capital improvements wrapping up, they expect to start generating more cash soon.
Shares of Polypore closed down $1.07 on Wednesday, at $35.84, down about 3 percent.