The 10-second takeaway
For the quarter ended March 31 (Q3), ResMed beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased significantly.
Margins improved across the board.
ResMed logged revenue of $349.1 million. The 11 analysts polled by S&P Capital IQ predicted a top line of $338.9 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $313.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.46. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.41 per share. GAAP EPS of $0.44 for Q3 were 29% higher than the prior-year quarter's $0.34 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60.3%, 200 basis points better than the prior-year quarter. Operating margin was 22.2%, 180 basis points better than the prior-year quarter. Net margin was 18.5%, 150 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $369.0 million. On the bottom line, the average EPS estimate is $0.46.
Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $1.65.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 171 members out of 184 rating the stock outperform, and 13 members rating it underperform. Among 59 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give ResMed a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ResMed is outperform, with an average price target of $30.60.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.