ResMed shares drop after first-quarter margin squeeze
Make us a preferred source
Make us a preferred source on Google
More news: Shares in ResMed are down 2.4% to $21.93 in early trading on the ASX after the respiratory health company reported gross margins contracted 250 basis points in the September quarter, due to costs associated with a field safety notification on Astral devices and higher component and manufacturing expenses.
ResMed margins squeezed despite strong Q1 growth
The news: Respiratory health company ResMed has posted strong revenue growth amid solid demand across its global sleep and respiratory care markets but saw margins squeezed in the first quarter.
The numbers: Revenue for the three months to September 30 rose 16% from a year ago to USD1.1 billion ($1.7 billion), while net income was up 5% to USD219.4 million with the company’s gross margin contracting 250 basis points to 54.4 per cent. 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 ongoing patient flow and solid demand, alongside increasing adoption of its outside hospital software solutions. However, margins contracted mainly due to costs associated with a field safety notification on Astral devices and higher component and manufacturing costs. The company said it has seen particularly strong growth this quarter in Europe and Asia, thanks to its ability to meet global demand with technologies, positioning it to continue growing.
The source: ASX announcement
