3,876 Volts were produced in February, which if annualized would imply total Volt production in 2012 of 42,636 vehicles. This is significant growth compared with 2011, but still below GM's production target of 60,000 vehicles in 2012.
"Either monthly production will need to continue to ramp in 2012 or this production target will not be met," Stifel wrote. In addition, there is the risk of another reduction in production schedules later in 2012 if sales do not begin to catch up with production.
For Polypore specifically, Stifel says that the February ramp in Volt production could be a sign that the pressures that led to its disappointing guidance for the first quarter won't be persistent, especially as it generates sales from a more diverse set of customers.
Gordon Johnson, analyst at Axiom Capital, who initiated coverage of Polypore at sell earlier this year, took a more negative view of the Volt sales/production imbalance, writing that even amid rebounding sales the Volt story is defined by excess inventory: "With sales significantly underperforming production (GM overproduced demand in Feb. 2012 by 129%), and excess inventory already in the channel, at some point this year GM will have to lower its production targets for Chevy Volts.""We believe that an acute revision lower to GM's production schedule lies ahead (again, this dynamic is what ultimately caused PPO to guide C1Q12 materially lower vs. Consensus as the battery maker that sells into Volt cars
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