Sharechat Logo

Daily ShareChat: Fisher and Paykel Healthcare

By Jenny Ruth

Tuesday 15th June 2010

Text too small?
 Jenny Ruth

First NZ Capital analyst Sarndra Urlich has downgraded her forecast of Fisher & Paykel Healthcare's 2012 earnings towards the lower end of consensus and her forecast of its 2013 earnings is now well below consensus.

Urlich says her previous forecasts looked high, particularly when compared with the earnings profile of the past few years and expected 2011 earnings.

"In other words, how realistic is our earnings 'hockey stick' scenario?"

In 2012, Urlich now assumes a slightly lower-margin product mix, less favourable exchange rate and has raised her expectation of the company's selling, general and administrative (SG&A) expenses to sell its new ICON range of obstructive sleep apnea treatment machines.

"As a reference point, we would note that Resmed spends around 30% to 31% of its revenues on SG&A," Urlich says. She is now expecting Fisher & Paykel to spend 25.5% of sales, up from 24.2% previously.

She is now forecasting an $86 million net profit for the year ending March 2012, down from $97 million previously.

For 2013, she expects a slightly lower exchange rate and slightly higher margins than in 2012, although the latter is lower than her previous forecast. In part, that reflects her expectation the company will spend 7% of sales on R&D, up from 6% previously. She now expects net profit in the year ended March 2013 will be $105 million, down from $121 million previously.

Recommendation: Underperform.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

NZ dollar rally may limit profit gains for Fisher and Paykel Healthcare, brokerage says
FISHER & PAYKEL HEALTHCARE ANNOUNCES NEW NASAL PILLOWS MASK AT INVESTOR DAY
Shares in Fisher and Paykel Healthcare third-best performer on NZX 50 after raising earnings forecast
Fisher and Paykel Healthcare raises 2014 earnings forecast on higher sales, margins
F and P Healthcare shares jump to highest in more than 2 years on profit outlook
F and P Healthcare beats 2013 guidance, forecasts boost in 2014 profit; shares gain to 2 1/2 year high
F and P Healthcare shares rise to two-year high as First NZ raises rating on better outlook
Fisher & Paykel Healthcare
F and P Healthcare lifts guidance as sales grow, margins widen; shares rally
F&P Healthcare 1H profit rises 18%, on record sales, wider margins