RMD -3.53%: ResMed delivered a solid March quarter result, with revenue and earnings both ahead of expectations, helped by ongoing demand for its sleep apnoea devices, masks and broader connected-care ecosystem.
3Q result highlights
- Adjusted EPS $2.86 vs. $2.37 y/y, estimate $2.80
- $1.43 billion, +11% y/y, estimate $1.42 billion
- Adjusted gross margin 62.8% vs. 59.9% y/y, estimate 62.4%
Devices revenue rose 8.8% to US$735.7m, masks and other revenue increased 15% to US$524.8m, while software-as-a-service revenue was up 6% to US$170.9m – which was a little light on. The masks result was particularly strong and remains an important driver given the recurring nature of replacement demand.
Gross margins also continued to move in the right direction, expanding to 62.8% from 59.9% a year earlier, ahead of consensus, showing the benefit of better pricing, product mix and operating discipline.
From our perspective, this was another solid result, but the stock still got sold off given weaker than expected growth on the SaaS side. The CFO also announced his retirement at an inopportune time.
MM is long and bullish RMD
Add To Hit List
