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Fisher & Paykel Healthcare beat its guidance with an 18% gain in first-half profit, making record sales while keeping a rein on costs and widening its margins. Profit in the full-year would also beat its estimate.
Profit was $33.3 million, or 6 cents a share, in the six months ended September 30, from $28.3 million, or 5.2 cents a year earlier, the Auckland-based company says in a statement. Sales rose 6% to $266.9 million.
The company's gross margin widened to 54.3% from 52.5% as growth in cost of sales lagged behind revenue growth at 2%. F&P healthcare will pay a first-half dividend of 5.4 cents a share, unchanged from a year earlier.
The strongest sales growth came from the company's respiratory and acute care division, where revenue climbed 9% to $142.9 million on demand for its RAC humidifier controllers and related consumables.
The company's RAC products warm and humidify gases used for mechanical ventilation, reproducing functions of the nose and upper airways.
"We are pursuing opportunities to increase the number of patients our devices can assist, by expanding from our traditional intensive care ventilation market into non-invasive ventilation, oxygen therapy, humidity therapy, neonatal respiratory care and surgery," the company says.
Its obstructive sleep apnea products business lifted sales by 3% to $114.2 million in constant currency terms.
Assuming current currency exchange rates endure, full-year sales would be $545 million to $555 million and net profit in a range of $69 million to $72 million. That is up from its August sales guidance of between $540 million and $550 million and profit of $65 million to $69 million.
The company lifted research and development spending by 7% to $21.3 million in the first half.
F&P Healthcare gets about 51% of its sales in US dollars, 22% in euros, 7% in Australian dollars and 5% in yen. During the first half, foreign exchange hedging gains contributed $21.2 million to operating profit, down from $22.2 million a year earlier.
Shares of the company last traded at $2.44 and have declined 3.6% this year. The stock is rated "outperform" based on the consensus of seven recommendations compiled by Reuters, with a price target of $2.40.
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