The ResMed Inc. (ASX: RMD) share price will be one to watch on Friday following the release of the sleep treatment-focused medical device company's fourth quarter and full year update.
How did ResMed perform in the fourth quarter and FY 2019?
In the fourth quarter ResMed reported a 13% increase in revenue to US$705 million, leading to the company posting an 11% increase in full year revenue to US$2.6 billion. In constant currency terms, revenue was up 15% for the quarter and 13% for the year.
Another positive was that the company's gross margin expanded by 120 basis points in the fourth quarter to 59.3%. For the full year its gross margin improved by 80 basis points to 59%.
Full year GAAP diluted earnings per share came in at US$2.80, with non-GAAP diluted earnings per share up to US$3.64. And net operating profit increased 7% and non-GAAP operating profit rose by 18% year on year.
ResMed's CEO, Mick Farrell, said: "We finished fiscal year 2019 with double-digit revenue growth to $2.6 billion and operating profit up 18% on a non-GAAP basis. Recent mask launches have driven market share gains while continued adoption of our SaaS solutions is driving both revenue growth and a steady margin profile."
He added: "We delivered another quarter of operating leverage, which gives us flexibility as we execute on our long-term strategy to provide innovative products, software, and solutions to improve health outcomes, create efficiencies, and reduce overall healthcare system costs. Our pipeline is solid; we are well-positioned as we enter fiscal year 2020 on a trajectory to improve 250 million lives in out-of-hospital healthcare in 2025."
How does this compare to expectations?
Based on the research notes I have seen, ResMed's result appears to have just about lived up to the expectations of the market.
Though analysts at Credit Suisse may be a touch disappointed. A recent note revealed that its analysts were expecting the company to report a 15% increase in full year revenue (in constant currency terms) and an 8% lift in earnings.
