How ResMed Inc. (CHESS) just printed another quarter of solid growth

ResMed Inc. (CHESS) (ASX:RMD) trades on 28x trailing adjusted earnings per share of US$2.82.

| More on:
bull vs bear 1

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This morning ResMed Inc. (CHESS) posted an operating cash flow of US$94 million on revenues of US$523.7 million for the quarter ending September 30 2017.

It will pay a quarterly dividend of US35 cents per share on adjusted earnings of US66 cents per share that came in roughly in line with analysts’ estimates.

San Diego-based ResMed reports its results in U.S. dollars as its primary listing is on the NYSE, while it offers ownership interests to Australian investors on the ASX that represent a 1/10th interest in the NYSE scrip. As the US scrip sells for US$78.60 the Australian scrip closed yesterday at A$10.15 on a USD/AUD FX-adjusted basis.

The company intends to recommence its share buyback later in the fiscal year to buy back at a minimum sufficient stock to neutralise the dilutory effect of its employee share payment scheme.

For the quarter revenue increased 11 per cent on a constant currency basis, while the key gross margins lifted to 58.4 per cent compared to 57.8 per cent in the prior year’s quarter. Adjusted net income came in at US$86.1 million, up 13 per cent on the prior year’s quarter.

On a trailing basis the group trades on 28x trailing adjusted earnings per share of US$2.82 with the U.S. scrip selling for US$78.61.


Analysts are forecasting another year of strong growth with the first quarter traditionally softer than the financial year end period. ResMed retains its bullet point revenue growth track record and profit is starting to track higher again after some margin headwinds in its core U.S. market.

For Australian investors then it remains a good long-term bet thanks to its position as a healthcare leader in a large global addressable market that has reasonable barriers to entry. The company also remains founder-led with a strong market position as it moves into the cloud-connected digital healthcare space.

Motley Fool contributor Tom Richardson owns shares of ResMed Inc. The Motley Fool Australia has no position in any of the stocks mentioned. You can find Tom on Twitter @tommyr345 We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »