ResMed shares rise after strong quarterly results
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More news: Shares in ResMed rose 2.4% to $33.16 in early trading in an otherwise weak Australian market. The medical equipment maker delivered higher fourth quarter revenue and expanded margins on the back of steady demand for its sleep apnea treatment devices.
Revenue for the June quarter rose 9% to US$1.22 billion ($1.88 billion), while net income was up 27% to US$292.2 million.
Andrew Dale, Partner, Investments at ECP Asset Management, said the company delivered a really solid result with the all important gross profit margin increasing ahead of expectations.
What they said: "This was driven by very strong growth in the higher margin masks segment, while the devices segment was slightly softer than expectations," Dale said.
"The story remains one of operating leverage and it was positive to see the company also guide to strong margins into FY25. With an ever growing funnel of demand spurred on by awareness from GLP1s [weight loss and diabetes drugs glucagon-like peptide 1], we remain positive on the topline revenue outlook for the company.”
ResMed lifts quarterly revenue, margins
The news: Medical equipment maker ResMed has lifted fourth quarter revenue and expanded margins on the back of steady demand and higher prices for its sleep apnea treatment devices.
The numbers: Revenue for the three months to June rose 9% to USD1.22 billion ($1.88 billion), in line with analyst estimates. Net income was up 27% to USD292.2 million with the company’s gross margin expanding 350 basis points to 58.5%.
It declared a quarterly cash dividend of 53 US cents per share, up from 48 US cents a year earlier.
The context: The ASX and NYSE-listed ResMed said June quarter revenue growth was driven by increased demand for its sleep devices and masks portfolio, as well as strong growth across its Software-as-a-Service business.
Margins also increased due to reduced freight and manufacturing cost improvements, an increase in average selling prices as well as a favourable product mix.
CEO Mick Farrell attributed the strong performance to ongoing patient and customer demand for its products and software solutions, which is driving solid growth across the devices, masks, and software businesses.
The sources: ResMed media release, ECP Asset Management
