Fisher & Paykel share price exhales following ‘strong’ full-year results

The COVID-19 tailwind is beginning to taper off, but how did Fisher & Paykel perform in FY22?

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Key points

  • The Fisher & Paykel share price is 0.9% higher at $18.89 apiece today 
  • Investors are bidding up shares despite company earnings tumbling 28% compared to the prior year 
  • The company has not provided guidance given ongoing uncertainties 

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price is breathing a sigh of relief after publishing its results for the full year ending 31 March 2022.

At the time of writing, shares are swapping hands at $18.89, 0.9% above their previous closing price.

Fisher & Paykel share price lifts on

  • Total operating revenue down 15% compared to the prior corresponding period to $1.68 billion
  • Net profit after tax (NPAT) down 28% to $376.9 million
  • New application consumables revenue up 3% on a constant currency basis
  • Research and development investment of $154 million
  • Declared final dividend of 22.5 cents per share, up 2% from the prior year
  • Total dividends for the financial year up 4% to 39.5 cents per share

What else happened during the year?

For the 12 months ended 31 March, Fisher & Paykel incurred a 15% decline in revenue to $1.68 billion. However, the company highlighted the unprecedented nature of the previous financial year during the peak of COVID-19. As such, Fisher & Paykel noted that the latest revenue result still represents a 33% stronger outcome than the pre-COVID-19 financial year.

The pandemic acted as a major catalyst for increased sales of various respiratory apparatuses. Furthermore, the company is building upon this success with the launch of two new nasal high flow interfaces, Optiflow Switch and Optiflow Trace.

With regards to profits, gross margin was reduced by 59 basis points to 62.6% during the year. Higher freight costs led to an increase in the use of air freight, resulting in margin pressure.

What did management say?

Commenting on the full-year result, Fisher & Paykel managing director and CEO Lewis Gradon said:

Over the last two financial years, we have supplied $880 million of hospital hardware, the equivalent of approximately 10 years’ hardware sales prior to COVID-19. The growing body of evidence supporting the use of nasal high flow and our other respiratory therapies shows that our products have a clear role to play in improving care and outcomes beyond COVID-19 patients. We have a proven fifty-year track record of changing clinical practice and now we have the additional benefit of customers already having our hardware and clinical experience with its use.

Overall, management reflected positively on its latest performance. However, the path forward appears to be cloudy for the company.

What’s next?

Looking forward, the Australian healthcare giant is taking a cautionary stance. According to the company, COVID-19 instances have possibly peaked, which leaves Fisher & Paykel expecting hospital hardware revenue to slow down in FY2023.

Moreover, management refrained from providing future guidance due to ongoing uncertainties. Although, freight costs are anticipated to remain elevated for the time ahead. In light of this, Fisher & Paykel is holding higher levels of inventory to negate freight issues.

Fisher & Paykel share price snapshot

Amid a cooling in sales growth, the Fisher & Paykel share price has tumbled throughout the front end of this year. Since the turn of 2022, shares in the respiratory device manufacturer have diminished by 39% in value.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen nearly 6% — which is still 33% better than the healthcare company.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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