Forecasts for Fisher and Paykel Appliances' after-tax profit for the full year remain 3% above the same period a year ago at $65.1 million, but the worldwide economic downturn appears set to bite harder.
The first quarter financial results of competitors Whirlpool and Electrolux revealed a marked deterioration in US and European markets, with Electrolux reporting a loss and Whirlpool a 20% profit decline and issuing a full-year profit warning.
ABN Amro Craigs broker Peter McIntyre said despite Appliances giving a "solid" earnings guidance in February, the market remained "fairly cautious" about the quality of the full-year result, scheduled to be released tomorrow.
"For this [full-year] result, our focus will remain on how well Appliances manages its margins for the second half of the year in the current conditions," Mr McIntyre said.
Appliances, which has stopped giving detailed financial guidance on its prospects, has faced spiralling raw material costs, increasing competition from imports and been hard hit by the high New Zealand dollar.
More than 1500 jobs have been lost in New Zealand, Australia and the US during the past two years, including the April 17 announcement of the loss of 430 jobs from its Mosgiel manufacturing plant in favour of manufacturing in Thailand, Mexico, the US and Italy.
In late-February, ABN downgraded Appliances' 12-month share price target by almost 30% because of concerns Australia would be the only sector showing growth.
While the ABN full-year 2008 forecast remains at $65.1 million after tax, it has downgraded the full-year 2009 forecast almost 10% to $68.3 million.
In late-March, Appliances took its 30-year-old finance division off the market after bids failed to match board valuations.
At the time, the finance division loan book for the first half of the year to September stood at $546 million and it contributed $13.3 million in earnings before interest and tax to the group.
Mr McIntyre said finance division full-year earnings before interest, tax depreciation and amortisation were expected to be down 7.2% because of increasingly difficult credit conditions.
Peter McIntyre's disclosure document is available on request.
