Sharechat Logo

Daily ShareChat: Fisher & Paykel Appliances

By Jenny Ruth

Friday 10th June 2011

Text too small?
 Jenny Ruth

Fisher & Paykel Appliance's finance company's earnings compensated for its weak appliances division's results for the year ended March, says Nachiket Moghe, an analyst at Aegis Equities Research which is owned by Morningstar.

"Underlying appliance margins decreased 80 basis points to 5.8% reflecting cost pressures and cutthroat pricing," Moghe says.

To some extent, this was offset by cost out measures stemming from the firm's global manufacturing strategy. "End markets remained challenging in New Zealand, US and Europe. Australia was the only bright spot," he says.

"For quite some time now the finance business has been underpinning group results and full-year 2011 was no different." The division's 20% rise in operating earnings (the appliance divisions' earnings fell 20%)were primarily driven by better margins.

"Earnings visibility remains low, given raw material cost volatility,demand issues and competitive pressures," he says.

He expects volumes to remain sluggish going forward and that raw material costs will rise in US dollar terms while the finance business could be impacted by higher interest rates.

"Given these uncertainties, we are sticking with our full-year 2012 net profit forecast of $36.3 million," Moghe says. That's up from the $33.5 million it reported for the year just gone.



Recommendation: Hold.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Haier reaches 90% of F&P Appliances, will move to acquire rest
Haier gets OIO approval for F and P Appliances takeover
Haier sweetens bid for F and P Appliances to bottom end of range
F and P Appliances halted pending announcement
Haier bid for F&P Appliances too low for AMP Capital
F&P Appliances climbs to just above Haier offer after valuation
F&P Appliances worth $1.28-$1.57 a share; Haier offer 'not compelling'
Fisher & Paykel Appliances
F and P Finance credit rating may be raised by S&P on Haier's offer
F and P Appliances set to jump to $1.20 offer price with Haier