ResMed Second Quarter Earnings Sneak Peek

ResMed Inc. (NYSE:RMD) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. 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 estimate of analysts is for net income of 51 cents per share, a rise of 21.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 48 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 51 cents during the last month. Analysts are projecting profit to rise by 24.1% compared to last year’s $2.16.

Past Earnings Performance: Last quarter, the company beat estimates by 3 cents, coming in at profit of 49 cents a share versus the estimate of net income of 46 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the first quarter, profit rose 41.1% to $71.3 million (49 cents a share) from $50.5 million (33 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 7.9% to $339.7 million from $314.8 million.

Here’s how ResMed traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

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Stock Price Performance: Between October 22, 2012 and January 17, 2013, the stock price rose $3.94 (9.7%), from $40.43 to $44.37. The stock price saw one of its best stretches over the last year between August 8, 2012 and August 21, 2012, when shares rose for 10 straight days, increasing 5.7% (+$2.02) 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: On average, analysts predict $363.8 million in revenue this quarter, a rise of 9.3% from the year-ago quarter. Analysts are forecasting total revenue of $1.5 billion for the year, a rise of 9.5% from last year’s revenue of $1.37 billion.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 21.1% in the third quarter of the last fiscal year and 31.4% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 8.7% in the second quarter of the last fiscal year, 11.4% in the third quarter of the last fiscal year and 8.8% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Analyst Ratings: There are mostly holds on the stock with six of 11 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 5.73 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.

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