The CSL Limited (ASX: CSL) share price is in focus as the healthcare giant gave investors a profit update for FY23.
CSL is one of the world’s largest healthcare businesses, with a large presence in areas like vaccines and iron deficiency treatments. It makes a lot of its profit in the US, and reports its result in US dollar.
CSL hurt by currency movements
The ASX healthcare share told investors today about the impact of foreign currency movements on the company’s FY23 forecast profit.
It’s now expecting a foreign currency headwind of around US$230 million to US$250 million. This is much higher than the initial US$175 million that was anticipated at the time of half-year result.
CSL said that its profit guidance in constant currency exchange terms for FY23 “remains unchanged”, although it’s “now skewed to the top end of the range”.
The healthcare company also said that it notes the broad range of published analyst profit projections for FY24. After completing the budget for the next financial year, CSL advised that its underlying net profit after tax (NPATA) is expected to grow by between approximately 13% to 18% to between US$2.9 billion to US$3 billion in constant currency terms.
NPATA is adjusted profit, which excludes impairment and amortisation of acquired intellectual property, business acquisition and integration costs and other acquisition accounting adjustments. In other words, it tells investors about the performance of the core operating profit.
When the company released its FY23 guidance in its HY23 result in February 2023, it said that revenue growth is expected to be between 28% to 30% in constant currency terms and that NPATA for shareholders would be between $2.7 billion and $2.8 billion at constant currency terms.
Final thoughts on the CSL share price
In early reaction, the Australian Financial Review reported that broker RBC Capital said it expects the FY24 profit guidance to be “taken negatively by the market” because it’s a “large miss” on analyst consensus expectations.
It will be interest to see what happens, but for long-term shareholders it’s good to see that the healthcare business is expecting another double-digit increase of underlying profit. CSL is certainly not the cheapest ASX share around, so there are other ASX growth shares I’d rather buy.
