After giving investors a trading update, the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has sunk more than 5%.
Fisher & Paykel is a manufacturer of hospital consumables and homecare products. It’s one of the businesses that provided healthcare equipment to help COVID-19 patients. It makes products and systems for use in acute and chronic respiratory care, surgery, and obstructive sleep apnea treatment. Its products are sold in more than 120 countries worldwide.
Fisher & Paykel’s share price sell-off
The healthcare ASX share said that it expects full-year operating revenue for FY22 to be between $1.675 billion to $1.7 billion.
Fisher & Paykel said that its second half hospital consumables revenue is currently tracking at a similar level as the first half of FY22. This is consistent with reports of the increasing prevalence of the Omicron variant over the last two months and its associated lower respiratory intervention requirements and a relatively mild flu season in the Northern Hemisphere.
OSA masks sales growth in the homecare product group is currently tracking above the first-half growth rate despite supply constraints of treatment hardware in the market.
The company noted that freight rates remain elevated for FY22 and are expected to hurt its gross profit margin target of 65%, by approximately 250 basis points (2.50%).
Management comments
Fisher & Paykel Managing Director and CEO Lewis Gradon said:
Regardless of how COVID-19 effects unfold over the short term, we are confident our business is well-placed to contribute to a positive change in clinical practice and improving outcomes for respiratory patients in general over the long term.
Summary thoughts on the Fisher & Paykel share price
The Fisher & Paykel share price has now fallen 22% in 2022. That’s a sizeable fall for such a large business.
It seems the COVID-19 profit boost is not settling back. And now the COVID-19 impacts on the supply chain are hurting margins.
For investors that have been interested in this business, it could be an opportune time to consider a parcel of shares. However, it’s not a business that I’m personally looking to add to my portfolio right now.
