KEY POINTS:
Foreign exchange issues are expected to loom large for Fisher & Paykel Appliances and F&P Healthcare when they report their annual results this week.
Investors will be familiar with their problems with the New Zealand dollar, which has remained stubbornly high.
While currency problems are likely to grab the headlines, Goldman Sachs JB Were strategist Bernard Doyle says both companies attract long-term investors who understand the Kiwi dollar will fluctuate from time to time and put pressure on earnings.
"Most people who are in these stocks are in for the long haul and are prepared to say 'well, we don't think 73, 74, 75 US cents is going to be the rate it's going to stay at forever'," Doyle says.
"Yes, it is a pain it might stay up for another six or 12 months but with these sorts of stocks, probably what is more important is what the underlying markets are doing."
Both companies issued profit warnings early this year.
In February, Appliances cut its annual profit forecast by about 20 per cent, blaming weak markets and tougher competition.
In the following month, Healthcare cut its annual operating profit forecast by 10 per cent to $88 million because of a high exchange rate.
Forsyth Barr analyst Guy Hallwright is expecting Healthcare to report a net profit of around $58.3 million for the year.
He said the high exchange rate will prompt the company to be cautious about its prospects in the year ahead.
For Appliances, Hallwright doubts there has been much of an improvement in the intensely competitive US market.
He also expects the going to be tough in Australia, although the water shortage may provide good news for some of Appliances' water-saving washers.
"But Australia, in general, has been flat, plus the strength of the New Zealand and Australian dollars has been a hindrance."
Hallwright expects Appliances to report net profit of about $62 million before abnormal items. He says it could make a provision in the result for the cost of shifting part of its manufacturing operations to Thailand.
Strong Australian and NZ dollars have not helped Appliances' sales in Australasia because they have brought down the cost of machines imported from Asia.
Healthcare reports its result on Wed- nesday, which will be followed by Appliances on Thursday.
On Friday, the Commerce Commission is expected to release its decision on whether a takeover of The Warehouse will lessen competition in the general foods market.
The Warehouse has been targeted by the country's two grocery chains, Woolworths Ltd - which is Australian-owned - and local co-operative Foodstuffs Ltd. There is no clear expectation in the marketplace as to which way the commission will turn.
