The ResMed Inc. (ASX: RMD) share price is down 5 per cent in morning trade to $9.19 after the healthcare specialist reported its results for the quarter ending June 30, 2017.
Below is a summary of the results for the quarter, with comparisons to the prior corresponding quarter and all figures in US dollars or cents as San Diego-based ResMed's primary listing is on the NYSE.
- Revenue up 7% to $556 million, or 8% on a constant currency basis
- Earnings per share (EPS) of 71 cents up 20%, or adjusted EPS of 77 cents up 4%
- Operating cash flow of $140.3 million
- Quarterly dividend up 6% to 35 cents per share
- Gross margin of 58.2%, up 10 bps
- Adjusted net income of $101.6 million, up 22%
- Quarterly dividend up 6% to 35 cents per share
This looks another solid quarter of top-line growth from the sleep apnea and home health specialist, although operational and research expenses generally marched higher in line with the revenue growth.
The stock also trades on a high valuation around 25x annualised earnings per share of $3.08 and today's share price falls are most likely a reflection of the lofty expectations of investors, rather than modest operational performance.
In fact for Australian investors in the ASX-listed CDIs today may be a good opportunity to invest in this market-leading healthcare business as the recent appreciation in the Australian dollar means it now has room to lower.
Overall, ResMed remains one of the better businesses on the ASX and if I did not already own shares I would look at an investment today. Moreover, if the stock were to drop another 10 per cent to around $8.40 per share, I would almost certainly be a buyer.
