Medical device maker ResMed Inc. (CHESS) (ASX: RMD) has unveiled its results for the fourth quarter of the 2015 fiscal year, posting a flat net income result despite a strong increase in revenues. That didn't bother the market which bid the stock 7.7% higher to $8.10 per share, adding almost $1 billion to the group's market value.
The Numbers
For the three-months ended 30 June 2015, ResMed reported US$453.1 million in revenues which represents a 9% increase on the prior corresponding period (pcp), or a 17% increase on a constant currency basis. This was aided by a "solid return to growth" in its mask business, together with a greater than 50% growth in flow generator sales in the Americas.
Revenues from the Americas represented well over half of the group's total for the quarter (US$273.7 million, up 27% on the pcp), while revenues from Europe and the Asia Pacific decreased by 10% to US$179.4 million.
Unfortunately, that revenue growth didn't find its way to the company's bottom line with net income remaining flat compared to the pcp at US$87.5 million while diluted earnings per share also remained flat at 61 US cents per share. ResMed blamed this on two non-recurring items, including a US$5 million expense related to a field safety notice and donations amounting to US$6 million; as well as unfavourable currency movements which impacted its European and Asia Pacific operations.
Revenue for the full-year was US$1.7 billion (up 8% on the pcp) while net income rose 2% to US$352.9 million.
What happens now?
The San Diego-based ResMed is a global leader in developing and manufacturing medical devices for the treatment of various sleep-related breathing disorders, with a particular focus on the fast-growing sleep apnea market.
Although investors may have been disappointed with the relatively flat earnings result, it is clear that the company is still growing strongly and with plenty of momentum going into the new financial year.
Commenting on the result, the group's Chief Executive Officer, Mick Farrell, said: "Our global team ended fiscal year 2015 with a strong (US) $1.7 billion in revenues as we continue to drive towards our goal of changing 20 million lives by 2020 with innovative products and solutions that improve patient outcomes, reduce the impact of chronic disease and lower healthcare costs."
Despite today's strong lift, investors should still consider building a long-term position in the stock in order to benefit from this trend. ResMed at very least deserves a position on your watch list.
