Stock of the day: ResMed
ResMed secures US tariff exemptions and reports 8% revenue growth to $1.3 billion while doubling California manufacturing capacity.
(AI video summary)
This video was created on 24 April for IG audiences by ausbiz.
ASX code: RMD
ResMed's tariff exemption boosts outlook
ResMed has received exemption from United States (US) trade tariffs for its exports from manufacturing facilities in Australia and Singapore. Chief Executive Officer (CEO) Mick Farrell acknowledges uncertainties under the current US administration, prompting the company to double its California manufacturing footprint to manage geopolitical risks.
Strong quarterly performance
- Quarterly revenue increased 8% to $1.3 billion, driven by demand for sleep devices and masks, plus growth in residential care software
- Gross margin improved by 140 basis points (bps) to 59.3%
- Operating income rose 14%, posting $579 million in operating cash flow,
- Diluted earnings per share (EPS) of $2.48, paying $78 million in dividends
ResMed shares have risen in morning trading following this report.
Investment perspective
Analysts view ResMed as a quality growth company with strong management, demonstrated by 9% constant currency revenue growth and expanding margins.
Some investors maintain current positions due to recent share price appreciation, while others see opportunities to increase holdings. The company's adaptability and innovation pipeline make it an attractive long-term investment.
Analysts consider potential tariff impacts as temporary, likely to be overshadowed by broader US fiscal challenges.
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