ResMed slumps as Q2 earnings miss

Medical group's shares hit six-month low after results fall short of analyst expectations, despite posting record profit.

Shares in ResMed Inc have slumped after the medical manufacturer's revenue for the December quarter fell short of analyst expectations, despite posting a record profit for the first half.

At 1053 AEDT the group's stock fell 5.04% to $4.995 against a benchmark S&P/ASX 200 index fall of 0.11%.

ResMed shares hit a six-month low of $4.90 in earlier trade, following the announcement of results.

In a statement to the Australian Securities Exchange, ResMed announced a record net profit after tax for the six months to December 31 2013 of $US167.6 million ($189.3 million), a 12% lift on the $149.2 million posted in the previous corresponding period.

However revenue for the December quarter, though two% higher at $US384.3 million, fell short of even the lowest estimate of $US391 million, according to Bloomberg.

ResMed's sales in the US – its largest market – fell two% to $US206.6 million in the three months to December 31.

ResMed chief executive Mick Farrell said market restructuring due to competitive bidding and increased competitor activity had contributed to the disappointing US numbers.

"Having said that, competitive bidding’s impact on volume in the US market is beginning to moderate, and we are partnering with our US customers to position for the growth that we see ahead," Mr Farrell said.

"It’s important to note that we have a rich pipeline of products scheduled for introduction, and we remain optimistic about future growth in the US market."

Mr Farrell said the strong overall result was driven by the group's global diversification strategy, which saw solid growth in European and emerging markets.

"We are pleased with our global operational performance, which allowed us to expand gross margins, and grow earnings at double-digit rates this quarter,” Mr Farrell said.

ResMed will pay a dividend for the December quarter on March 19, equivalent to 25 US cents on the date of record, February 19.

The group has dual listings on the ASX and the New York Stock Exchange

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