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NEW YORK (

TheStreet

)

-- Polypore International

(NYSE:

PPO

) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:

  • Net operating cash flow has increased to $57.67 million or 44.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.61%.
  • 40.79% is the gross profit margin for POLYPORE INTERNATIONAL INC which we consider to be strong. Regardless of PPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.60% trails the industry average.
  • PPO, with its decline in revenue, underperformed when compared the industry average of 8.3%. Since the same quarter one year prior, revenues fell by 14.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • POLYPORE INTERNATIONAL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, POLYPORE INTERNATIONAL INC reported lower earnings of $1.38 versus $2.24 in the prior year. For the next year, the market is expecting a contraction of 8.7% in earnings ($1.26 versus $1.38).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 50.8% when compared to the same quarter one year ago, falling from $14.23 million to $7.00 million.

Polypore International, Inc., a technology filtration company, develops, manufactures, and markets specialized microporous membranes used in separation and filtration processes. It operates in two businesses, Energy Storage and Separations Media. Polypore International has a market cap of $1.97 billion and is part of the industrial goods sector and industrial industry. Shares are down 5.6% year to date as of the close of trading on Wednesday.

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