ResMed Earnings Preview

Motley Fool Staff
Updated

While ResMed (NYS: RMD) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings Thursday. ResMed is a developer, manufacturer, and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back ResMed as a buy. But with 61.5% of analysts rating it a buy, ResMed is still below the mean analyst rating of its nearest nine competitors, which average 64.4% buys. Analysts like ResMed better than competitor CareFusion overall. Six out of 12 analysts rate CareFusion a buy compared with eight of 13 for ResMed. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared with three months ago.

  • Revenue Forecasts: On average, analysts predict $334.8 million in revenue this quarter. That would represent a rise of 14.8% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.36 per share. Estimates range from $0.34 to $0.38.

What our community says:
CAPS All-Stars are solidly behind the stock with 98.4% granting it an "outperform" rating. The community at large concurs with the All-Stars with 93.5% awarding it a rating of "outperform." Fools are keen on ResMed, though the message boards have been quiet lately with only 73 posts in the past 30 days. Even with a robust four out of five stars, ResMed's CAPS rating falls a little short of the community's upbeat outlook.

Management:
ResMed's profit has risen year over year by an average of 22.1%.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

58.3%

60.8%

61.7%

59.9%

Operating Margin

20.4%

22.8%

23.5%

23.5%

Net Margin

17.0%

19.1%

20.1%

18.2%

For all our ResMed-specific analysis, including earnings and beyond, add ResMed to My Watchlist.

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At the time thisarticle was published

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