Resmed shrugs off slumber
Dual-listed sleep disorder devices maker Resmed shrugged off softer than expected March-quarter revenue growth, by highlighting new product launches as it continues to run hard in the key American market.
In the March quarter, earnings per share rose to US58¢ from US44¢ a year before, but with revenue growth of just 10 per cent to $US383.6 million weighing on sentiment.
The shares closed on Friday at $4.46, down 4¢ but clear of the day's low of $4.39.
"The shares rallied ahead of the release, which prompted some quick selling on the actual news," one securities analyst said.
Analysts had expected revenue for the quarter to reach about $US400 million, but rising competition in the US coupled with continuing sluggish sales in Europe weighed on the outcome.
US revenue rose 13 per cent, but in Europe growth was just 6 per cent, the company said. In the US, Resmed had robust 21 per cent growth in flow generator sales, which underpinned much of its revenue gains in that market.
In Europe, aggressive bidding by some competitors in the large German market resulted in loss of some business.
Analysts remain concerned about competitive pressures in the United States where rivals such as New Zealand's Fisher & Paykel have been active with new product launches.
In response, Resmed highlighted its own new product pipeline, especially approvals for the launch of a new product to treat chronic obstructive pulmonary disease.
Analysts pointed to management's success in containing costs, with more of Resmed's products now produced in Singapore.
Overall, a better than expected profit margin of 62.4 per cent helped lift the bottom line, analysts said. Nomura Australia analyst David Stanton said: "We continue to see upside from Resmed's medium and longer-term dynamics in terms of growth from the rollout of home sleep testing in the US and increased focus on diseases associated with obstructuve sleep apnoea."
Resmed has declared a US17¢-a-share dividend, with holders of its locally listed shares to receive a US1.7¢-a-share payout.