The ResMed Inc (ASX: RMD) share price is currently down 3% despite reporting growth in FY22.
ResMed is a digital health technology and cloud-connected medical device that aims to help people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases.
ResMed’s profit update
The healthcare business was able to tell investors about its FY22 fourth quarter and the overall FY22 result.
Let’s look at the fourth quarter first:
- Revenue rose 4% to $914.7 million
- The gross profit margin improved from 56% to 57.1%
- Non-GAAP/underlying income from operations (operating profit) up 4% to $271.5 million
- Non-GAAP/underlying net profit up 10% to $219.2 million
Now let’s see how this played into the full year numbers:
- Revenue rose 12% to $3.58 billion
- The gross profit margin worsened from 57.5% to 56.6%
- Non-GAAP/underlying income from operations (operating profit) went up 8% to $1.07 billon
- Non-GAAP/underlying net profit up 9% to $851 million
ResMed said that the fourth quarter and FY22 result demonstrated “strong growth” and its market leadership.
It boasted that it saw continued adoption of its most advanced platform innovation to date, the 100% cloud-connected AirSense 11. It launched this solution into several new countries while continuing to see strong sales in the US.
It also introduced its newest device, which is designed to work without an embedded communications module. The redesign allowed ResMed to increase deliveries to customers and get many more patients onto sleep apnea and respiratory care therapy.
ResMeds thinks both of these platforms will help support “solid growth” throughout FY23. Growth is an important factor for the ResMed share price.
The company said that it saw incremental revenue in the range of $60 million to $70 million related to a competitor’s recall during the fourth quarter of FY21.
During the period, ResMed announced it was going to acquire MEDIFOX DAN, a German leader in out-of-hospital software solutions for providers in major settings. This acquisition is for approximately US$1 billion.
Final thoughts on the ResMed share price
It’s good to see that the business has managed to keep delivering profit growth and continues to expect more growth to come.
However, after a 20% rise of ResMed share price since May, it’s probably not the opportunity it was before.
I’m not sure if ResMed is a buy at this price, I’m happy to leave the investing in this one to other investors and focus on different ASX growth shares.
