Source: ResMed, Facebook.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: ResMed (NYSE:RMD), a medical device maker with a focus on treating sleep-disordered breathing, caused its shareholders to gasp during today's trading session with its shares tumbling as much as 11% intraday following the release of its third-quarter earnings results.

So what: For the quarter, ResMed announced a 6% increase in revenue to $422.5 million, which was negatively affected to the tune of seven percentage points by foreign currency translation, and a 2% increase to its adjusted EPS to $0.65 from the year-ago quarter. ResMed's management praised the adoption of its new flow generators (Astral, AirSense 10, and AirCurve 10), strong demand in the U.S. for its products, and the acquisition of privately held Jaysec, a provider of cloud-based software solutions for the home-based medical equipment industry, as the reasoning behind ResMed's 13% constant currency growth.

On a comparative basis, the $0.65 per share profit ResMed reported was in-line with Wall Street's expectations, while the $422.5 million in revenue fell $4.2 million short of estimates.

Now what: On the surface it would appear that much of today's negativity surrounds the fact that ResMed missed Wall Street's consensus revenue target due to foreign currency translation weakness. As the U.S. dollar continues to gain strength domestically, it's wreaking havoc on U.S. multinationals that report in dollars but earn revenue in overseas markets and have to translate back into dollars for reporting purposes. That could be the case here.

However, I keep honing in on the deeper analysis offered by management of ResMed's third-quarter results, including its discussion of the company's declining gross margins. Specifically, the press release notes,

"Gross margin in the third quarter was 59.5 percent, lower than the prior year, mainly due to declines in average selling prices, an unfavorable product and geographic mix, and an unfavorable impact from foreign exchange rate movements."

Source: ResMed, Facebook.

Note that part about the decline in selling prices and the unfavorable product mix. My assumption, following management's praise, was that the adoption of ResMed's new product was strong. However, average selling price weakness (which admittedly could be caused by strength in the U.S. dollar to some degree) and an unfavorable product mix would suggest that either competition could be chipping away at ResMed, or its market share isn't as robust as management would like to think in the sleep management arena.

Following a robust $30 per-share gain since October, I can certainly understand investors' skepticism following today's results. Even after today's tumble ResMed is still valued at roughly 23 times forward earnings. It does have mid-to-high single-digit revenue growth potential which could help put a floor under its shares soon, but I'd personally rather stay on the sidelines and look for more attractively priced device makers with stronger pricing power elsewhere.