ResMed hits new highs as quarterly earnings leap
SHARES in the sleep apnoea equipment maker ResMed were pushed to new highs on Friday as investors reacted positively to record earnings for the December quarter and the company's forecast of continued growth.
Driven by buoyant sales of high-margin products, earnings per share hit US53¢ for the quarter, up from US42¢ a year earlier, which pushed the half-year earnings to $US1.02, up from US75¢.
Revenue for the quarter surged to $US376.5 million from $US332.7 million, reaching $US716.3 million for the half, up from $US647.5 million.
Revenue growth remained strongest in the US, rising 16 per cent in the quarter, well ahead of the 10 per cent growth recorded elsewhere. Despite challenging European conditions, Britain, France and Germany "delivered solid quarterly results", the chairman and chief executive, Mr Peter Farrell, told analysts.
The company said unit sales were growing at 4 per cent to 6 per cent in Europe, 6 per cent to 8 per cent in the US, and 8 per cent to 10 per cent in the Asia-Pacific region.
With the strong Australian dollar, production and assembly in Singapore now accounts for more than half of all units sold. This will eventually rise to an estimated 75 per cent, the company told analysts
Along with its production of high-end units in Australia, ResMed produces some low-end products such as masks in Malaysia.
The optimistic outlook, along with speculation that a weaker Australian dollar would give earnings a push, helped the shares hit new highs of $4.60 before easing slightly to finish at $4.58, up 30¢. ResMed's shares traded at $2.50 a year ago.
"These guys are industry best. They are great strategists," the Wilson HTM analyst Shane Storey said of the results. "It's had a great quarter, but the current quarter will be up against very strong year-earlier numbers," which may make growth comparisons difficult.
A dividend of US17¢ a share was declared, with holders of its Australian-listed scrip entitled to a dividend of US1.7¢ a share.