ResMed Inc.
(
RMD
) reported earnings per share ('EPS') of 49 cents in the first
quarter of fiscal 2013, comfortably beating the Zacks Consensus
Estimate of 46 cents. The results were also better than the
year-ago EPS by 48%. Apart from increased sales and higher
margin, a 5.2% fall in shares outstanding contributed to the EPS
improvement.
Revenues increased 8% year over year (up 12% at constant
exchange rates or CER) to $339.7 million, almost in line with the
Zacks Consensus Estimate. Based on a favorable product mix and
vastly under-penetrated and growing sleep-disorder breathing
market, revenues in the Americas increased 15% to $194.4 million
but remained flat (up 9% at CER) outside the Americas at $145.4
million. Strong year-over-year growth in flow generator and mask
categories contributed to the overall growth.
The company reported domestic flow generator sales of $84.8
million in the quarter, up 17% year over year due to strong
growth in Automatic Positive Airway Pressure ("APAP") systems.
Masks and other sales were $109.6 million, up 13% year over year,
driven by strong contributions across the mask product range and
continued growth in accessories. Outside the Americas, Flow
Generator sales were $96.7 million, down 2% year over year but up
7% at CER. Outside Americas Masks and other sales were $48.6
million, up 4% (up 13% at CER) year over year. At CER, worldwide
Flow Generator sales increased 11% year over year, while masks
and other increased 13%.
Gross profit climbed up 12.7% to $208.6 million leading to a
260 basis points (bps) expansion in gross margin to 61.4%.
Selling, general and administrative, and research and development
expenses during the quarter were up 4% (up 9% at CER) to $98.3
million and up 4% (up 6%) to $27.2 million, respectively,
favorably impacted by an appreciating US dollar. Nevertheless,
operating margin increased 390 bps to 24.5% during the
quarter.
ResMed exited the quarter with cash and cash equivalents of
$890.6 million compared with $809.5 million at the end of fiscal
2012. Cash flow generated from operations was $78.3 million
during the first quarter.
ResMed repurchased 216,000 shares for $8.1 million during the
quarter (13.6 million shares for $391.2 million in fiscal 2012)
and was left with the authorization to repurchase 8.6 million
shares. In fiscal 2013, ResMed intends to purchase at least 2
million shares through its existing share buyback program.
Additionally, the Board of Directors declared a quarterly
dividend of 17 cents per share, payable on December 18, 2012.
Despite the challenging macroeconomic scenario in Europe, we
are encouraged by ResMed's overall improved top and bottom-line
performances during the first quarter of fiscal 2013. Presently,
ResMed is emphasizing building strategic relationships in order
to penetrate further in the domestic and international arena that
includes the 5-year exclusive distribution agreement with
CareFusion
(
CFN
).
Currently, ResMed retains a short-term Zacks #3 (Hold
Rank).
CAREFUSION CORP (CFN): Free Stock Analysis
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RESMED INC (RMD): Free Stock Analysis Report
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