Wednesday, April 9, 2008

Fisher & Paykel Healthcare profit downgrade masks good performance

It was almost inevitable that Fisher & Paykel Healthcare [FPH] would come out with a new lower profit guidance to March 31 2008 today, from a former guidance of NZ$67 million down to $58 million dollars.

A higher NZ dollar marks down profit to the company when repatriated back to New Zealand of approximately NZ$2.5 million every percentage point the $US goes down against our currency.

The very good news that should put shareholders minds at rest is that US revenue was up strongly by 18% to US$ 270 million.

On the back of that though high demand for the company's respiratory humidifier products outstripped supply in the all important United States market.

Clearly this shouldn't have happened and management should be well displeased with their efforts in letting down buyers and consumers alike. This highly competitive market doesn't like mistakes such as these.

High demand also for Fisher's consumables and their respiratory and acute care products allowed CEO,Michael Daniell to comment,"we expect a strong start to the new financial year and continuing increase in demand for our products".

Fisher and Paykel Healthcare have grown strongly in the US market over the last five years and are one of the most innovative and technologically driven companies of its type in the world.

FlexiFit 405 Nasal CPAP/BiPAP Mask with Headgear from Fisher & Paykel
Image courtesy FPH

Fisher & Paykel FlexiFit 405 Nasal CPAP/BiPAP Mask with Headgear

Its disruptive sleep apnoea products are especially world leading and it is a fast growing market because of snoring problems caused by overweight and obese patients. The United States is clearly the centre of the sleep apnoea universe because of its sheer number of affected patients and therefore potential consumers.

Its latest sleep apnoea product has been given FDA approval to be used in a home setting.

The size of the Sleep apnoea market and the company's products excited me so much I invested.

FPH shares closed down 12c today to NZ$2.93 pr share on heavy volume.

Historically Fisher & Paykel Healthcare have grown revenues and profits steadily and their innovation and continued R & D spending will assure they will stay on the cutting edge when it comes to product updates and consumer satisfaction and their future looks bright if the innovation continues.

Fisher & Paykel Healthcare @ Share Investor

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c Share Investor 2008

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