Annoyed market punishes Fisher & Paykel

By Campbell McIlroy

Friday 15th February 2002

Fisher & Paykel Healthcare was punished by an unforgiving market yesterday after surprising investors with a lower-than-expected third- quarter result.

Shares in the company dropped as much as 16% in morning trading, bottoming out at $11.75 before recovering to about $12 at lunch time. Brokers said the markets had been punishing companies which failed to deliver to the level expected. "FHP did that today and was punished," one said.

Operating revenue for the three months ended December 31 was up a disappointing 1% to $55.8 million.

Analysts said increased demand in the company's core products had led to lower prices and started to squeeze the company's margins.

New products were also yet to bear fruit with some sectors already showing signs of increased competition. The company was also struck by bad luck with a mild northern winter resulting in a mild flu season and fewer humidifier sales.

One broker said it was surprising FHP hadn't given the market any indication of the sales levels it had been experiencing.

Across the three product groups FHP revealed operating revenues increased in the respiratory humidification group by 4% to $29 million, CPAP sleep apnea group was up 10% to $19.8 million and the patient warming and neonatal care group was up 9% to $3.6 million.

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