Resmed Reports 12% Jump in Profit


SYDNEY -- Sleep disorder equipment supplier Resmed (ASX: RMD.AX) has today announced record revenue and income for the quarter ending June 2012. Profit for the quarter was $76.8 million, an increase of 31% over the previous corresponding period, while revenue climbed 9% to $371.9 million.

For the year ended June 2012, the company has reported a 10% increase in revenue to $1.4 billion, with net income rising 12% to $254.9 million compared with the previous year. The majority of the record revenue comes from a 13% jump in sales in the U.S., while revenue from the rest of its operations increased by 3%.

The reported profit equates to earnings per share of AU$0.175 for the financial year, with the company using some of the vast cash reserves on its balance sheet to pay a AU$0.017 cent per-share dividend for the quarter. As of the end of June, Resmed had $809.5 million in cash, with just $251 million in long-term debt, despite investing 6% to 7% of its revenue in research and development.

It appears the message that untreated sleeping-related disorders are debilitating -- and, at worst, life-threatening -- is getting out there. Research has shown that people with untreated sleep apnea have a higher risk of dying from cancer and suffering diabetic peripheral neuropathy, a debilitating disease which causes severe pain in the hands and feet.

The company says there is mounting evidence connecting serious health disorders with untreated sleep-disordered breathing, and it wants testing for sleep-disordered breathing to be as common as having one's blood pressure taken.

If the company gets its way into even a few Western countries, it could see the sale of its products skyrocket.

Investors should note that Resmed's primary stock listing is on the New York Stock Exchange, with a secondary listing on the ASX. Shares on the ASX are listed at a ratio of 10-to-1 to the U.S.-listed shares and generally trade around one-tenth the value of the U.S. shares. As a simple example, each U.S.-listed share earned $1.75 for the year and is entitled to a $0.17 cent dividend this quarter.

Resmed was an Australian company but has been based in the U.S. for some time now, with operations in more than 70 countries. It is one of a growing number of leading Australian health-care companies that are in the process of conquering the global market.

Cochlear (ASX: COH.AX), is a leader in the hearing-implants market, with a global share estimated at 60%. Blood and plasma products maker CSL (ASX: CSL.AX) is another leader in its field and has grown its plasma therapies from just AU$33 million in revenue in 1991 to AU$3.8 billion in 2011. CSL announced today that CEO Brian McNamee is leaving the company in July 2013 after 23 years at the helm, during which you might say he was mostly responsible for driving the company's amazing 20-year growth.

Also taking on the world is Australian health-care company Sirtex Medical (ASX: SRX.AX), an innovative liver cancer treatment supplier that aims to become the world leader in that field. It also believes its technology can be applied to other diseases.

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Motley Fool writer/analyst Mike King owns shares in Cochlear and CSL. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, while it's still available. This article contains general investment advice only (under AFSL 400691). Authorized by Bruce Jackson.

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