The ResMed (ASX: RMD
) share price is up around 5% despite the ASX having a fairly rough day. It announced its third quarter update.
What is ResMed?
Resmed 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.
What did ResMed reveal?
The healthcare business announced that revenue rose by 16% to $769.5 million. It was a rise of 17% on a constant currency basis.
ResMed said that its non-GAAP (generally accepted accounting practices) gross margin increased by 70 basis points (0.70%) to 60%.
Its net operating profit increased by 39%, whereas the non-GAAP profit growth was slightly slower at 31%.
On the one hand the company’s life support ventilators, non-invasive ventilators and ventilation mask systems have seen enormous demand. This is what has largely driven the result. The sleep apnea side of the business saw less exciting growth, but it still did quite well.
The ‘software as a service’ division also did well with 12% revenue growth thanks to a good performance by Brightree and MatrixCare.
ResMed CEO Mick Farrell said: “Looking ahead, we are confident in our ability to navigate through the challenging clinical and economic environment to deliver for all our stakeholders. Our culture, operational resilience, strong balance sheet, business continuity plans and growth prospects have positioned us well.”
Thinking about buying ResMed? It’s likely to see good demand for the rest of the year. But it’s a question of whether you aim for a much cheaper share that’s been hit hard, or a (comparatively) more expensive business that keeps growing.
These technology shares could be better ideas to buy:
[ls_content_block id=”18457″ para=”paragraphs”]
Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
