ResMed Fourth Quarter Earnings Sneak Peek

ResMed Inc. (NYSE:RMD) will unveil its latest earnings on Thursday, August 2, 2012. ResMed is a developer, manufacturer and distributor of medical equipment for treating, diagnosing and managing sleep-disordered breathing and other respiratory disorders.

ResMed Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 48 cents per share, a rise of 23.1% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved up. It has dropped from 49 cents during the last month. For the year, analysts are projecting net income of $1.72 per share, a rise of 17.8% from last year.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 5 cents, reporting profit of 46 cents per share against a mean estimate of net income of 41 cents. In the second quarter, the company exceeded forecasts by 4 cents with profit of 42 cents versus a mean estimate of net income of 38 cents.

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A Look Back: In the third quarter, profit rose 21.1% to $64.6 million (44 cents a share) from $53.4 million (34 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 11.4% to $349.1 million from $313.3 million.

Stock Price Performance: Between May 2, 2012 and July 27, 2012, the stock price fell $3.15 (-9%), from $35.01 to $31.86. The stock price saw one of its best stretches over the last year between March 6, 2012 and March 15, 2012, when shares rose for eight straight days, increasing 8.8% (+$2.55) over that span. It saw one of its worst periods between May 21, 2012 and June 4, 2012 when shares fell for 10 straight days, dropping 5.6% (-$1.80) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 7.9% in revenue from the year-earlier quarter to $368.9 million.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 17.3% in the fourth quarter of the last fiscal year, 11.6% in the first quarter and 8.7% in the second quarter before increasing again in the third quarter.

There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 6.9% for the last four quarters.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 5.15 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 5.46 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12.8% to $257.5 million while assets rose 6.3% to $1.33 billion.

Analyst Ratings: There are six out of 11 analysts surveyed (54.5%) rating ResMed a buy.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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