The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price looks set to edge lower this morning following the release of its full year results.
At the time of writing the medical device company's New Zealand-listed shares are trading around 1% lower in early trade.
What happened in FY 2019?
In FY 2019 Fisher & Paykel Healthcare delivered a record sales and profit result. It posted operating revenue of NZ$1.07 billion and net profit after tax of NZ$209.2 million, which was an increase of 9% and 10%, respectively, on the prior corresponding period.
The company's managing director and CEO, Lewis Gradon, advised that its innovative products were key drivers of its solid result.
He said: "Our record results were driven by our innovative products, the dedication of our teams around the world, a culture of continuous improvement and the value we offer for clinicians and patients. It is now 50 years since the inception of our business and our results this year are a reflection of our long term and consistent growth strategy."
The star performer was arguably the company's Hospital product segment, which includes products used in respiratory, acute, and surgical care. It achieved record operating revenue of NZ$642.3 million, up 12% on the prior corresponding period.
Operating revenue for the Homecare product segment, which includes products used in the treatment of obstructive sleep apnoea (OSA) and respiratory support in the home, rose 6% to NZ$421.5 million. Management advised that a hiatus in OSA mask launches was offset by a strong contribution from the successfully completed roll out of the company's new SleepStyle OSA device to all major markets.
Gross margin increased by 56 basis points to 66.9%, primarily due to a favourable product mix.
Outlook.
Management appears optimistic on FY 2020. Saying: "Achieving $1 billion in revenue is a milestone for our company, however, we are not sitting still. We will continue to build on our strengths and continuously improve and expand our portfolio of valued solutions for healthcare providers and patients."
It expects full year operating revenue for FY 2020 to be approximately NZ$1.15 billion and net profit after tax to be in the range of NZ$240 million to NZ$250 million.
How does this result compare to expectations?
According to a note out of Goldman Sachs, it expected revenue of NZ$1,082.6 million and net profit after tax of NZ$202.5 million in FY 2019. This means the company missed on the top line but beat on the bottom line.
Looking ahead, the broker had pencilled in revenue of NZ$1,178.9 million and net profit after tax of NZ$247.8 million in FY 2020, which is broadly in line with the company's guidance.
Things certainly look positive in the medical device industry right now. As well as Fisher & Paykel Healthcare, a number of companies such as Nanosonics Ltd (ASX: NAN) and ResMed Inc. (ASX: RMD) have also posted record results this year.
