NZ stocks: Fisher and Paykel drag market down

12.00 pm

Fisher and Paykel Healthcare continued to drag on the New Zealand sharemarket this morning after a disappointing result saw the stock fall spectacularly from grace yesterday.

The stock fell a further 90c, or just under 8 per cent, to 1050 after yesterday's 19 per cent drop.

The company yesterday reported bottom line profit for the December quarter rose 28 per cent to $14.1 million but the stock was sold off as doubts were raised about the sustainability of its big profit margins and ambitious growth targets.

"The rot continues," ASB Securities dealer Andrew Kelleher said.

"It looks like there are still institutional holders whose expectations have been unfortunately not realised in that latest result.

"I suspect we are going to see a little bit more selling over the course of the day, although we are reaching levels where buyers will start to look at the stock.

"When the stock is in this sort of free-fall, you need a few days to clear out all the people that have now decided they don't want to be in the stock."

Fisher & Paykel's share price has come off a high of $18.75 hit on November 27 shortly after the company was spun off from Fisher & Paykel Industries.

The company's sister stock, Fisher and Paykel Appliances, was down 15c at 920.

Those falls, coupled with a 4c drop in market leader Telecom to 528, shoved the benchmark NZSE-40 index down 9.81 points to 2072.35 by 11 am.

Fisher and Paykel Healthcare, at $27 million, made up the lion's share of total turnover worth $50 million.

In other news, market newcomer Briscoe Group slipped 10c to 159 after announcing a 16.4 per cent increase in sales in the fourth quarter.

Same store sales rose to $87.9 million in the three months ending January 27 compared with $75.5 million in the same quarter a year ago, the homeware and sporting goods retailer said.

"You have got to remember that Briscoes performed extremely well in its first few weeks on the market. I don't think it is at all of concern that it is pulling back now," Mr Kelleher said.

"There will be short term traders that bought the stock that would have been very well rewarded in the last few weeks and are now doing a bit of profit-taking."

Casino operator Sky City was down 3c at 606 after announcing yesterday it was proposing to more than double the size of the convention centre it is building beside its Auckland casino.

Auckland Airport was up 4c at 388, Carter Holt Harvey was down a cent at 186, Contact Energy was down 2c at 372, Fletcher Building was up a cent at 300, and The Warehouse lost 3c to 650.

Independent News Ltd continued its recent strong run following Wednesday's positive profit result. It was up 4c at 404, while its 66-per cent owned offshoot Sky Network TV was up 5c at 445.

Credit services company Baycorp Advantage slid 8c to 662.

Baycorp is embroiled in a dispute with other debt collection agencies over the use of its database.

Some debt collection agencies are refusing to lodge notices of debt defaults on the database since Baycorp introduced a $5 charge on November 1.

The dispute means companies could be giving credit to people regarded as bad risks.

There were 25 rises and 34 falls among the 101 stocks traded.

In the United States technology stocks slid on fears about mounting debt in the telecom sector and more accounting blow-ups, but upbeat economic data lifted the Dow Jones industrial average over the key 10,000 mark.

The blue-chip Dow Jones Industrial average gained 12.32 points, or 0.12 per cent, to 10,001.99, closing above the 10,000 mark for the first time since January 10.

The broad Standard & Poor's 500 index slipped 2.03 points, or 0.18 per cent, to 1116.48, and the technology-packed Nasdaq composite index dropped 15.79 points, or 0.85 per cent, to 1843.37.

- NZPA