ResMed surges on revenue boost
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The news: Shares in ResMed had jumped 7.5% to $28.74 at around 2:30pm AEDT after the California-based respiratory health company posted a 12% revenue boost in the December quarter. Net income fell 7% year on year to US$208.8 million ($317.5 million) due to tighter margins and restructuring costs of US$64.2 million.
ResMed lifts quarterly revenue but margin squeeze continues
The news: Respiratory health company ResMed has posted strong revenue growth across its global sleep and respiratory care businesses but saw margins squeezed in the December quarter.
The numbers: Revenue for the three months to 31 December rose 12% from a year ago to USD1.16 billion ($1.76 billion), slightly above analyst expectations. However, net income was down 7% to USD208.8 million with the company’s gross margin contracting 50 basis points to 55.6%. It declared a quarterly cash dividend of 48 US cents per share.
The context: The ASX and NYSE-listed ResMed said the revenue growth was driven by increased demand for its sleep devices as well as strong growth across the mask product portfolio. However, margins fell mainly due to costs associated with a field safety notification for masks with magnets, while there were also restructuring costs of USD64.2 million including employee severance and asset impairments. The results reflect strong growth across the combined device, masks and accessories, and residential care software business, as well as cost discipline, CEO Mick Farrell said.
The source: ASX announcement
