For the second consecutive earnings season, our old friend Polypore International (PPO) popped significantly on earnings day.
I am surprised by the magnitude (16 cents) of the beat since the one segment of the business that has investors excited (lithium) is relatively small, but the entire battery segment (i.e. energy storage) was strong this quarter. Lead acid battery separators was the line item out of left field, with a 33% year over year gain. The less exciting separations media business only grew 12%, but is now approaching only 25% of quarterly revenue.
From the earnings report:
In the quarter, sales for the Energy Storage segment were $136.6 million, an increase of $35.2 million, or 35%, compared with the prior-year period.
- Sales of lead-acid battery separators were $94.5 million, an increase of $23.5 million, or 33%, compared with the prior-year period, with strength demonstrated across all geographic regions.
- Lithium battery separator sales were $42.1 million, an increase of $11.7 million, or 39%. The increase reflects strong demand in consumer electronics, growing demand in Electric Drive Vehicles (EDVs) and the incremental benefit of new capacity during the quarter.