The billion-dollar developer and supplier of medical devices and applications ResMed Inc [ASX:RMD] has been drifting up in share price after the company announced it has earned a 16% increase in revenue, up $1.4 billion.
The RMD share price was boosted by 2% by the early afternoon, trading at $33.69 a share.
In its sector, over the last 12 months, RMD has lowered by 3.5%. However, off its own track record, the stock has gone up more than 7% over the same timeline.
By comparison, industry leader CSL [ASX:CSL], though flat today, has climbed 18% in the last 12 months.
Source: tradingview.com
ResMed generates $1.4 billion in revenue
Respiratory disorder tech pioneer ResMed has announced a whopping 16% year-on-year growth in revenue, touting the cash round-up of $1.4 billion and an increase of 13% in operating profit.
The company was thrilled with these results, which were highlighted in the company’s second-quarter report for fiscal year 2023.
Thanks to the second quarter’s revenue ramp-up, ResMed’s half-year revenue grew to a total of US$1.98 billion (AU$2.8 billion).
While positive news, the latest results were matched with estimates already predicted by analyst consensus, according to the Australian Financial Review.
With the company’s operating income increased by 13%, non-GAAP operating profit also went up by 14%.
The results recorded this quarter also translate to a benefit to shareholders, represented in diluted earnings per share of $1.53 and non-GAAP diluted earnings of $1.66 per share.
However, the quarterly report also revealed the company’s gross margin had decreased 30 bps to 56.1%, with non-GAAP gross margin churning 80 bps to 56.8%.
ResMed explained this was due to lacking product developments and changing exchange rates.
For the six months ended 31 December 2022, general expenses incurred came to $405 million, and R&D (Research and Development) expenses totalled $133 million.
Operating cash flow for the quarter came to $128.6 million, which the company said reflected the impact of working capital increases.
Mick Farrell, ResMed’s CEO stated:
‘During the second quarter, we significantly increased production and delivery of flow generator devices to meet the incredible demand from customers, resulting in strong sales growth in the Americas, and solid overall performance for our business across 140 countries.
‘During calendar year 2022, we improved over 149 million lives, and we are well on our way to our goal of helping 250 million people sleep better, breathe better, and live higher-quality lives with outside-hospital care in 2025.’
ResMed keeps its eyes on the end goal
Farrell attributed the overcoming of final regulatory hurdles and the closure of acquiring MEDIFOX DAN as helping the business gain SaaS business outside the US — particularly in Germany.
The company, which provides lifesaving therapy solutions through digital health, COPD, and out-of-hospital care, says that it remains focused on its goals for the near future.
ResMed has now opened a new Advanced Manufacturing Centre in Tuas, Singapore with a 270,000-square-foot (25,000-square-metre) facility.
The company hopes the facility will add manufacturing capacity and footprint in order to scale production for connected devices and mask systems to further help the people in which it serves.
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