ResMed third-quarter earnings below expectations, contract profit margins

  • ResMed Inc MDM Q3 FY22 sales increased 12% year-over-year (+14% at constant currency) to $864.5 million, beating consensus of $897 million.
  • Revenue growth was driven by increased demand for sleep and respiratory care devices and increased demand following an ongoing recall of competing devices Koninklijke Philips NV PHG some products.
  • ResMed generated between $35 million and $45 million in incremental device revenue due to the impact of the competitor recall.
  • The company expects to face supply chain challenges that hamper its ability to increase device supply.
  • ResMed expects a total incremental device revenue opportunity for FY22 of $200-250 million, up from $300-350 million.
  • Speaking on the earnings conference call, chief executive Mick Farrell said the backlog of patients for sleep apnea devices was between 12 and 18 months old.
  • Adjusted gross margin increased from 59.6% to 58.1%, primarily due to higher transportation and manufacturing costs, partially offset by favorable product mix changes and higher average selling prices .
  • Adjusted EPS hit $1.32, down from $1.30 a year ago and below the consensus of $1.42.
  • Dividend: ResMed has declared a quarterly cash dividend of $0.42 per share, payable June 16 and the May 12 record date.
  • Price Action: Shares of RMD closed down 0.56% at $213.51 on Thursday.

Comments are closed.