ResMed (ASX: RMD) suffers on 2nd quarter revenue
Stock
ResMed (ASX: RMD) $14.64 as at 24/01/2019
Event
Just two days after cracking new all-time highs, ResMed has dropped over 10% today on poor second quarter results.
The sleep apnoea device manufacturer noted revenue & operating profit increased 8%, while margins increase 70bps to produce EPS of $0.86. Despite what seems like strong figures on first glace, they fall short of the markets growth expectations. Consensus revenue for the quarter was at $US 673m vs the company’s reported revenue of $651m, or a 3.5% miss to expectations.
The market has clearly gotten ahead of itself here, and analysts will have to revise profit targets lower for the short term at least.
Coupled with the revenue miss was the announcement that the company would suspend the share buy-back program that was in place, pointing to the recent acquisitions however one would be forgiven the suspension related to the surging share price.
ResMed (ASX: RMD) Chart
Market Matters Take/Outlook
