Medical equipment maker ResMed Inc. (RMD), Thursday reported a significant rise in profit for the second quarter, helped by a 23% increase in revenues. RMD shares gained more than 4% in after hours, following the news.
The San Diego, California-based company's net income for the second quarter was $45.98 million, up 36% from $33.85 million in the prior-year quarter. Earnings per share for the quarter were $0.60, an increase of 36% from $0.44 per share in the previous year.
On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.55 per share for the quarter. Analysts' estimates typically exclude special items. Revenue for the quarter was $275.13 million, up 23% from $222.98 million in the prior year quarter. Revenue increased 17% on a constant currency basis. Seven Wall Street analysts expected revenues of $259.04 million for the quarter.
In the preceding first quarter, the company reported net income that increased to $42.102 million or $0.55 per share from $28.026 million or $0.36 per share last year. Net revenue increased to $246.992 million from $217.931 million last year.
Cost of sales in the quarter under review increased to $110.93 million from $91.95 million a year ago. Gross profit was $164.20 million, compared to $131.02 million last year.
Total operating expenses increased to $106.28 million from $87.69 million in the year-ago period. SG&A costs were $84.1 million, up 20% from last year. R&D expenses increased 28% to $19.1 million from a year ago.
Income from operations increased to $57.92 million from $43.33 million in the previous year.
Total other income increased to $5.17 million from $3.65 million last year. Interest income increased to $3.17 million from $2.67 million a year ago.
Inventory, at $182.9 million, increased by $25.4 million compared to June 30, 2009. Accounts receivable days sales outstanding, at 70 days, decreased by 4 days compared to June 30, 2009.
Kieran Gallahue, president and chief executive officer, commented, "In the second quarter of fiscal 2010, we continued to show strong growth year over year. Our favorable mix of product sales and market share gains led to a 20% increase in the Americas over the prior year's quarter, resulting in $148.0 million in revenue. Sales outside the Americas increased by 27% to $127.1 million over the prior year's quarter, or a 14% increase on a constant currency basis. Cash flow from operations for the December quarter was $11.6 million."
The company also noted recent launch of its Swift FX mask in Europe and the Mirage SoftGel mask in the Americas, as well as the release of newest generation of flow generators - the ResMed S9 series, with meaningful new features and a new look and feel.
For the six-month period, net income increased to $88.08 million or $1.15 per share from $61.88 million or $0.80 per share in the previous year. Net revenue for the period rose to $522.13 million from $440.91 million a year ago.
RMD closed Thursday's regular trading at $50.93, down 1.23 or 2.36%, on a volume of 0.98 million shares on the NYSE. In after hours, the stock gained 2.07 or 4.06%, trading at $53.00. In the past 52-week period, the stock traded in a range of $31.49 to $53.99, on a 3-month average volume of 0.58 million shares.
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