ResMed (NYSE:RMD) Releases Quarterly Earnings Results, Beats Estimates By $0.24 EPS

Key Points

• ResMed exceeded quarterly expectations: EPS was $2.91 versus the $2.67 consensus, while revenue rose 5.9% year over year to $1.41 billion, above estimates of $1.39 billion.
• Management maintained its fiscal 2027 outlook for 5%–7% core constant-currency revenue growth and $12–$12.25 in non-GAAP EPS, while noting potential headwinds from inflation and a French fleet refresh.
• Shareholder returns increased: ResMed raised its quarterly dividend to $0.66 per share and repurchased $936 million of stock in the quarter, contributing to more than $1 billion returned to shareholders.

ResMed (NYSE:RMD - Get Free Report) issued its quarterly earnings data on Thursday. The medical equipment provider reported $2.91 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.67 by $0.24, FiscalAI reports. ResMed had a return on equity of 25.58% and a net margin of 26.94%. The business had revenue of $1.41 billion during the quarter, compared to analyst estimates of $1.39 billion. During the same period in the previous year, the firm earned $2.55 EPS. ResMed's quarterly revenue was up 5.9% compared to the same quarter last year.

Here are the key takeaways from ResMed's conference call:

• Strong Q1 performance: Revenue rose 7% on a core constant-currency basis to approximately $1.4 billion, while non-GAAP EPS increased 14% to $2.91, supported by demand across sleep devices, masks, and residential-care software.
• Gross margin expanded 50 basis points to 62.5% as procurement, manufacturing, and distribution productivity gains more than offset foreign-exchange and inflationary pressures. Management maintained its expectation for low-double-digit-basis-point gross-margin expansion for fiscal 2027.
• ResMed reiterated fiscal 2027 guidance for 5%-7% core constant-currency revenue growth and $12-$12.25 in non-GAAP EPS, but said the most likely outcome remains the midpoint. Growth could be helped by pricing and marketing initiatives, while France’s fleet refresh will create a back-half headwind and inflation remains a risk.
• New ecosystem initiatives are showing encouraging early traction, including fabric masks that have delivered a reported 6% adherence improvement, SmartComfort’s 4.3% increase in 30-day compliance, and more than 2.1 million inquiries to the Dawn generative-AI sleep coach.
• The company returned more than $1 billion to shareholders in Q1, including $936 million in share repurchases, and expects to return at least $1.85 billion during fiscal 2027. ResMed also highlighted continued investment in U.S. and global manufacturing capacity, though ramp-up costs will weigh on margins in coming quarters.

ResMed Stock Up 0.7%

Shares of RMD traded up $1.83 during mid-day trading on Thursday, hitting $252.00. 1,420,050 shares of the company's stock were exchanged, compared to its average volume of 1,102,420. The company has a debt-to-equity ratio of 0.06, a current ratio of 3.10 and a quick ratio of 2.42. ResMed has a 52 week low of $180.26 and a 52 week high of $277.67. The company has a market cap of $35.44 billion, a PE ratio of 22.40, a P/E/G ratio of 1.53 and a beta of 0.75. The company has a 50-day simple moving average of $231.83 and a 200 day simple moving average of $225.57.

ResMed Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, September 24th. Stockholders of record on Thursday, August 20th were paid a dividend of $0.66 per share. The ex-dividend date of this dividend was Thursday, August 20th. This represents a $2.64 annualized dividend and a dividend yield of 1.0%. This is an increase from ResMed's previous quarterly dividend of $0.60. ResMed's dividend payout ratio (DPR) is 25.31%.

Insider Transactions at ResMed

In other news, CEO Michael J. Farrell sold 4,991 shares of the business's stock in a transaction dated Wednesday, October 7th. The shares were sold at an average price of $226.33, for a total value of $1,129,613.03. Following the completion of the sale, the chief executive officer owned 479,803 shares of the company's stock, valued at approximately $108,593,812.99. The trade was a 1.03% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Peter C. Farrell sold 970 shares of the stock in a transaction that occurred on Wednesday, September 2nd. The stock was sold at an average price of $234.73, for a total transaction of $227,688.10. Following the transaction, the director owned 51,803 shares in the company, valued at approximately $12,159,718.19. The trade was a 1.84% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 24,343 shares of company stock valued at $5,396,098 over the last 90 days. 0.58% of the stock is owned by corporate insiders.

Analyst Ratings Changes

RMD has been the topic of a number of research reports. KeyCorp lifted their price target on shares of ResMed from $255.00 to $267.00 and gave the company an "overweight" rating in a research note on Monday, August 31st. The Goldman Sachs Group reissued a "buy" rating on shares of ResMed in a research report on Wednesday, July 1st. UBS Group restated a "buy" rating and set a $300.00 price objective on shares of ResMed in a report on Tuesday, July 21st. Piper Sandler dropped their price objective on shares of ResMed from $233.00 to $225.00 and set a "neutral" rating on the stock in a report on Friday, August 7th. Finally, Robert W. Baird set a $213.00 price objective on shares of ResMed in a research report on Friday, August 7th. Seven equities research analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. According to MarketBeat, the stock presently has a consensus rating of "Hold" and a consensus price target of $243.23.

ResMed News Summary

Here are the key news stories impacting ResMed this week:

• Positive Sentiment: ResMed reported adjusted earnings of $2.91 per share, well above the $2.67 analyst consensus and up from $2.55 a year earlier. The earnings beat is the clearest catalyst for the stock’s positive reaction. ResMed Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: Quarterly revenue reached $1.41 billion, exceeding the $1.39 billion forecast and increasing 5.9% year over year. The combination of sales growth and earnings outperformance strengthens the company’s near-term investment case. ResMed Earnings Report
• Positive Sentiment: ResMed’s net margin was 26.94% and return on equity was 25.58%, indicating strong profitability and efficient use of shareholder capital. Reports also characterized the quarter as strong and highlighted shareholder returns. ResMed Posts Strong Q1 Results and Shareholder Returns
• Neutral Sentiment: The earnings call and company presentation may provide additional detail on demand trends, product performance and management’s outlook, but the available reports do not identify a material change to forward guidance. ResMed Q1 2027 Earnings Call Transcript
• Neutral Sentiment: Pre-earnings coverage focused on whether ResMed could overcome investor concerns about growth; the reported revenue and earnings beats largely addressed those near-term worries. Can ResMed Answer Growth Doubts?

About ResMed

ResMed Inc is a medical equipment and software company that develops solutions for sleep-disordered breathing, respiratory conditions and other chronic diseases. The company is best known for its positive airway pressure (PAP) devices used to treat obstructive sleep apnea, along with masks, accessories and related patient support services.

ResMed also provides cloud-connected health technology, including remote-monitoring platforms and software used by healthcare providers, medical equipment suppliers and care organizations.

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