ResMed Earnings: Here’s Why Investors are Selling Shares Now

ResMed Inc. (NYSE:RMD) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.24%.

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ResMed Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 26.09% to $0.58 in the quarter versus EPS of $0.46 in the year-earlier quarter.

Revenue: Rose 9.89% to $383.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: ResMed Inc. reported adjusted EPS income of $0.58 per share. By that measure, the company beat the mean analyst estimate of $0.56. It missed the average revenue estimate of $387.68 million.

Quoting Management: Michael “Mick” Farrell, chief executive officer, commented, “In the third quarter of fiscal 2013 we showed strong year-over-year growth on both top and bottom lines. Revenue in the Americas increased by 13%, to $215.2 million over the prior year’s quarter. Revenue outside the Americas was $168.4 million, an increase of 6% (also a 6% increase on a constant currency basis) over the prior year’s quarter. Operating profit for the March quarter was $96.1 million, cash flow from operations was $107.0 million, while gross margin was 62.4%, all demonstrating excellent operating performance. During the quarter, we also repurchased 1.5 million shares, at a cost of $67.3 million, as part of our ongoing capital management program.”

Key Stats (on next page)…

Revenue increased 1.87% from $376.54 million in the previous quarter. EPS increased 7.41% from $0.54 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.61 and has not changed. For the current year, the average estimate has moved up from a profit of $2.22 to a profit of $2.23 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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