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F&P Healthcare Shares Plunge Most in a Year on Earnings Outlook

May 26 (Bloomberg) -- Fisher & Paykel Healthcare Corp. fell the most in a year in Wellington trading after the company said volatile currency markets may leave full-year profit little changed.

“Head winds” from higher exchange rates may limit profit to between NZ$70 million ($47 million) and NZ$75 million in the year ending March 31, Managing Director Mike Daniell said on a conference call today. The New Zealand maker of breathing masks and hospital equipment earlier said profit rose 15 percent last year to NZ$71.6 million. The stock fell 4.4 percent.

Fisher & Paykel gets about 78 percent of its sales in Europe and North America and booked a NZ$20 million gain on foreign exchange contracts in the March year. While the company has most of its U.S. dollar and euro sales covered for the current year, the balance will likely be booked at higher exchange rates than last year, Chief Financial Officer Tony Barclay said on the call.

Fisher & Paykel fell 15 cents to NZ$3.25 at 5 p.m. in Wellington, the lowest close since March 29 and the biggest one-day decline since May 26 last year. The NZX 50 Index gained 0.3 percent.

Net income of about NZ$70 million had been expected, rising to NZ$77 million this year, according to the average of eight analyst estimates compiled by Bloomberg News.

The company’s forecast assumes the New Zealand dollar averages 67 U.S. cents in the year ending March 31. The currency has dropped 8.1 percent this month after reaching a 15-month high of 76.35 cents in October. It last traded at 66.60 cents.

About 67 percent of this year’s U.S. dollar sales are covered at an average rate of 60 cents, Barclay said, while 70 percent of euro-denominated sales are covered at 45 euro cents.

The New Zealand dollar last traded at 54.18 euro cents, having reached a 34-month high of 57.29 on May 17.

To contact the reporter on this story: Gavin Evans in Wellington on gavinevans@bloomberg.net

To contact the editor responsible for this story: Iain Wilson at iwilson2@bloomberg.net

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