California-based health company ResMed Inc (ASX: RMD) has released its quarterly results for the period ended 30 September 2018.
ResMed has started Fiscal 2019 with a continued strong performance, posting 13% improvement in the top line revenue growth for the Q1 FY19. This has taken company’s first quarter revenue to $588.3 million underpinned by significant growth across the entire product portfolio of the company.
ResMed’s Chief Executive Officer Mick Farrell stated that during the quarter ResMed has expanded its product portfolio with introducing new masks and making ongoing upgrades in digital health solutions, that positions ResMed to standout from competition.
Driven by the recent acquisition of ‘HEALTHCAREfirst’ and continued growth in Brightree service offerings, ResMed’s Software as a Service revenue increased 25 percent, compared to the prior year period. Income from operations increased by 28 percent while net income increased by 23 percent to $105.7 million in September 2018 quarter.
However, Gross margin was slightly lower than the prior year quarter mainly due to the headwinds from decline in average selling prices. This translates a shift from 58.4% margin in September 2017 quarter to 58.3% margin in September 2018 quarter.
The top line growth of the company has reflected 16% improvement in Europe, Asia and other markets’ revenue driven by devices sales. Whereas in U.S., Canada, and Latin America markets revenue, except from SaaS, was 10 percent higher than previous corresponding year. It has led to deliver 22 percent growth in diluted earnings per share of $0.73 per share in Q1 FY19.
The Board has declared cash dividend of USD 0.037 for the quarter ended 30 September 2018. It is 100% unfranked dividend and is payable on 13 December 2018 to the shareholders recorded on registry as on 8 November 2018. It was further informed that shareholders trading on ASX via chess depository instruments of RMD will be entitled to receive the same amount of dividend in AUD based on foreign exchange rate on the record date. The ex-dividend date has been fixed to 7 November 2018.
Among its operational activities, the launch of ResMed’s first minimal-contact full face CPAP mask, AirFit F30, was the highlight. This new product in company’s portfolio has attracted the customers who are looking for the flexibility to wear glasses in bed or to reduce facial contact with a full-face mask. Further the company has completed the takeover of software solutions and services company HEALTHCARE first at the start of FY19, for consideration of $126.3 million.
As a part of company’s ongoing capital management program, ResMed has bought back its 200,000 shares at a cost of $22.8 million.
On the positive results of Q1 FY19, ResMed share price surged 3.636% to trade at $14.250 on 26 October 2018. The stock has seen a performance change of +34.94% over the past one year. PE ratio was 45.970 x with market capitalization of $19.62 billion as of today.
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