ResMed (ASX:RMD) shares fall after reporting flat sales in Q3 FY21

Summary

  • Digital health behemoth ResMed has released its quarterly results for the March 2021 quarter reporting flat sales.
  • The Company witnessed lower device sales and decreased demand for its ventilators due to COVID-19.
  • However, strong sales in ResMed’s mask product portfolio helped generate 2% revenue growth in Canada, Latin America, and the US.

Dual-listed world-leading digital health player ResMed Inc (ASX:RMD, NYSE:RMD) today announced results for its quarter ended 31 March 2021. ASX 200-listed ResMed witnessed lower device sales and decreased demand for its ventilators due to COVID-19. This has impacted the revenue growth of the Company.

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Some of the other ASX companies reporting their quarterly results today include Pharmaxis Limited (ASX:PXS), Artemis Resources Limited (ASX:ARV), Vection Technologies Ltd (ASX:VR1) and Botanix Pharmaceuticals Limited (ASX:BOT) and Petratherm Limited (ASX:PTR).

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Let us look at the quarterly results in detail:

Revenue highlights

During the quarter, the Company derived no incremental revenue from COVID-19-related demand. For comparison, RMD had posted US$35 million worth of incremental revenue in the same quarter last year.

Without considering the impact of the incremental COVID-19-related revenue from the prior-year quarter, revenue increased by 1% on a constant currency basis.

  • Revenue in the US, Latin America, and Canada, except from Software as a Service, grew by 2%. The growth was driven by robust sales across the mask product portfolio, partially offset by lower device sales, including reduced demand for ventilators.
  • Revenue in Europe, Asia, and other markets dropped by 13% on a constant currency basis due to lower device sales, including decreased demand for the ventilators because of the pandemic and flat sales in the mask product portfolio.
  • Software as a Service revenue was up 5% because of continued growth in resupply service offerings and stabilising patient flow in out-of-hospital care settings.

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Other key highlights-

  • The Company stated that income from operations increased by 3%, and non-GAAP income from operations increased by 2%.
  • Net loss for the quarter was US$78.5 million, mainly due to the additional income tax reserve of US$254.8 million.
  • Non-GAAP net income increased by 1% to US$190.4 million.

During the quarter, the Company declared a quarterly cash dividend of US$0.39 per share and paid US$56.8 million in dividends. The dividend will be payable on 17 June 2021.

Mick Farrell, CEO of ResMed, commented:

Mr Farrell also added that in the near future, the Company foresees increased awareness of respiratory health importance, rising adoption of digital health, as well as an increased focus on the importance of delivering healthcare services at home.

Furthermore, ResMed is confident in accelerated growth in patient flow and ongoing progress for the Company’s goal of advancing 250 million lives in out-of-hospital healthcare in 2025.

On 30 April 2021, RMD shares were trading at AU$26.015, down 4.777% at AEST 12:16 PM.

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