KEY POINTS:
Share market analysts expect Fisher and Paykel Appliances to report a solid, but unspectacular, first-half result on Thursday.
F&P Appliance's managing director John Bongard was positive about the company's prospects at the annual meeting in August, when he said the finance division would again deliver a satisfactory result for the full financial year.
Bongard said at the time that earnings from the appliances division were encouraging and ahead of budget.
Forsyth Barr analyst Guy Hallwright says the company's first-half result to September 30 will be better than the last few results, which have been flat.
"Their comments at the AGM, I thought, were pretty encouraging," he says.
Complicating matters will be a tax credit of around $2 million arising from the new corporate tax rate.
Without the tax credit, Hallwright sees a net profit of around $30 million, up from $26.2 million for the same period last year.
Abnormals may also come into account, given the costs involved with the shift in manufacturing to Thailand, which will be partly offset by the sale of a warehouse in East Tamaki.
Goldman Sachs JB Were expects revenue to be flat due to the buffeting customers have taken from escalating fuel prices and high interest rates.
"We would expect these macro headwinds to have been a drag on first-half volume growth," the brokerage says in a research note.
Goldman Sachs expects the company's net profit before abnormals to rise by 2.8 per cent to $28.5 million, but for earnings before interest and tax (EBIT) to fall by 3.3 per cent, to $52.5 million.
Increased raw material costs are likely to have led to a small reduction in operating EBIT for the appliances division, while higher interest rates, lower reinvestment levels and weaker market sentiment are likely to have had a negative impact on the finance division margins, Goldman Sachs says.
But the company's Australian operations are expected to show robust underlying demand for appliances and increased competition from imports due to the strength of the Australian dollar.
In August, F&P Appliances said it would move its electronics factory to Thailand to cut costs. The move followed a decision in April to shift its laundry plant there.
F&P Appliances has already moved a number of its production facilities to China and the United States in the past two years to cut costs and be closer to its key markets.
In May, the company reported a 4 per cent drop in annual net profit to $61.2 million due to tough markets and a high New Zealand dollar.
