ResMed Inc (ASX: RMD) announced the fourth quarter result of its 2019 financial year.
ResMed Inc is a United States based business that develops and manufactures medical devices to help people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. ResMed, which is short for Respiratory Medicine, was founded in 1989 by Dr Peter Farrell and now helps customers & patients in over 120 countries.
Here’s What ResMed Reported
For the fourth quarter the company showed a 13% increased in revenue to US$705 million, it was up 15% on a constant currency basis. The gross margin also improved by 1.2% to 59.3%. Reported net operating profit decreased by 18% but non Generally Accepted Accounting Principles (GAAP) operating profit increased by 18%.
ResMed also increased its quarterly dividend by 5% to US$0.39 per share.
With the final quarter being finished, the healthcare company was also able to reveal its full year numbers.
FY19 revenue increased by 11% to US$2.6 billion and up 13% in constant currency terms. Its gross margin increased by 0.8% to 59%. Reported net profit increased by 7% and the non-GAAP operating profit grew by 18%.
ResMed CEO Mick Farrell said: “Recent mask launches have driven market share gains while continued adoption of our SaaS solutions is driving both revenue growth and a steady margin profile.
“We delivered another quarter of operating leverage, which gives us flexibility as we execute on our long-term strategy to provide innovative products, software, and solutions to improve health outcomes, create efficiencies, and reduce overall healthcare system costs. Our pipeline is solid; we are well positioned as we enter fiscal year 2020 on a trajectory to improve 250 million lives in out-of-hospital healthcare in 2025.”
Is ResMed A Buy?
The market was clearly supportive of ResMed’s result. The problem is assessing what the right valuation to buy ResMed shares is.
I like that it continues to grow its gross margin, making each revenue dollar more profitable than the last. However, the share price has performed very strongly over the past six months. It may be too expensive at today’s level.
The growth shares in the free report below could be better instead.
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