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Can Overall Growth Drive ResMed's (RMD) Q4 Earnings?
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ResMed Inc. (RMD - Free Report) is slated to report fourth-quarter and fiscal 2018 results after market close on Aug 2. Last reported quarter, the company delivered a positive earnings surprise of 10.84%. Moreover, the company surpassed estimates in all the trailing four quarters with an average beat of 10.82%.
Let's see, how things are shaping up for this announcement.
Key Catalysts
ResMed is expected to gain from a strong performance on the domestic as well as international front like the previously reported quarter. In the past few earnings, the company’s domestic revenues were driven by solid growth in devices and masks as well as a continued double-digit software sales rise. Moreover, the sleep apnea patient volume consistently witnessed a steady improvement. We expect these trends to find reflection in the impending fourth-quarter results as well.
Internationally, revenues across Europe, Asia and other markets are likely to register a solid increase, banking on a strong device and masks performance. Within devices, sleep apnea patient volume should continue to expand through the company’s marketing efforts and channel partners. In Canada and Latin America, a sturdy uptake of AirSense 10 device platform along with the Air Solutions cloud-based software platform should further add value to the company’s portfolio.
At present, ResMed’s three largest sleep apnea therapy geographies, namely the U.S., France and Japan have systems that incentivize the adoption of the company’s connected health solutions including AirSense 10, AirCurve 10, AirView and myAir. In fiscal third quarter, the French market continued to benefit from its telemonitoring reimbursement incentives. Apart from France and Japan, a decent generation of revenues from a number of other countries worldwide, has contributed very strongly to device revenue growth across Europe and Asia during the earlier reported quarter. This momentum should continue through the fourth quarter as well.
Within mask and accessories outside the United States, the company is expected to benefit from nasal and full face categories, namely AirFit N20 and the AirFit F20, respectively.
Per ResMed, the company equipped with more than 1.5 billion nights of medical sleep and medical respiratory care data, is successfully working on simplifying workflow and improving patient outcomes. This improvement should drive the company’s top-line performance in the yet-to-be-reported quarter.
Domestically, ResMed is extremely upbeat about the latest tax reform, which witnesses transformation into a territorial tax system. This in fact, allows the company to invest its global cash assets without any artificial constraints. Per ResMed, it is now free to invest in three new ways: firstly, growing upon its existing strong U.S. manufacturing footprint; secondly, expanding its existing U.S.-based research and development capability and finally, building upon its existing valuable U.S.-based intellectual property assets. Effective January 2018, this is expected to remain accretive to the company’s operational result in the fiscal fourth quarter.
Other Factors Likely to Influence ResMed's Q4
ResMed continues to progress on the back of its three-pronged growth strategy. In this regard, the company diligently aims at improvement in the adjacent product and geographic markets including homecare ventilation for Chronic Obstructive Pulmonary Disease, Amyotrophic Lateral Sclerosis and other respiratory disorders as well as the emerging markets of China, India and Brazil. ResMed still considers portable oxygen concentratorsan important addition to its menu of respiratory care products.
Moreover, since ResMed’s acquisition of Brightree in fiscal 2016, the former has strongly progressed with the latter’s software-as-a-service business and its latest offerings targeting the home health and hospice market. On fiscal third quarter’s earnings call, ResMed noted that Brightree systems handled more than 8.2 billion digital requests. We expect this upside to further sustain through the fourth quarter.
Here’s what the quantitative model predicts:
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP.
ResMed has a Zacks Rank #3 and an Earnings ESP of +3.97%, a combination indicative of the company’s likely earnings beat this reporting cycle.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other medical stocks worth considering with the right combination of elements to also beat on earnings this time around:
Baxter International Inc. (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
BioScrip, Inc. has an Earnings ESP of +3.22% and a Zacks Rank of 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Can Overall Growth Drive ResMed's (RMD) Q4 Earnings?
ResMed Inc. (RMD - Free Report) is slated to report fourth-quarter and fiscal 2018 results after market close on Aug 2. Last reported quarter, the company delivered a positive earnings surprise of 10.84%. Moreover, the company surpassed estimates in all the trailing four quarters with an average beat of 10.82%.
Let's see, how things are shaping up for this announcement.
Key Catalysts
ResMed is expected to gain from a strong performance on the domestic as well as international front like the previously reported quarter. In the past few earnings, the company’s domestic revenues were driven by solid growth in devices and masks as well as a continued double-digit software sales rise. Moreover, the sleep apnea patient volume consistently witnessed a steady improvement. We expect these trends to find reflection in the impending fourth-quarter results as well.
Internationally, revenues across Europe, Asia and other markets are likely to register a solid increase, banking on a strong device and masks performance. Within devices, sleep apnea patient volume should continue to expand through the company’s marketing efforts and channel partners. In Canada and Latin America, a sturdy uptake of AirSense 10 device platform along with the Air Solutions cloud-based software platform should further add value to the company’s portfolio.
At present, ResMed’s three largest sleep apnea therapy geographies, namely the U.S., France and Japan have systems that incentivize the adoption of the company’s connected health solutions including AirSense 10, AirCurve 10, AirView and myAir. In fiscal third quarter, the French market continued to benefit from its telemonitoring reimbursement incentives. Apart from France and Japan, a decent generation of revenues from a number of other countries worldwide, has contributed very strongly to device revenue growth across Europe and Asia during the earlier reported quarter. This momentum should continue through the fourth quarter as well.
Within mask and accessories outside the United States, the company is expected to benefit from nasal and full face categories, namely AirFit N20 and the AirFit F20, respectively.
Per ResMed, the company equipped with more than 1.5 billion nights of medical sleep and medical respiratory care data, is successfully working on simplifying workflow and improving patient outcomes. This improvement should drive the company’s top-line performance in the yet-to-be-reported quarter.
Domestically, ResMed is extremely upbeat about the latest tax reform, which witnesses transformation into a territorial tax system. This in fact, allows the company to invest its global cash assets without any artificial constraints. Per ResMed, it is now free to invest in three new ways: firstly, growing upon its existing strong U.S. manufacturing footprint; secondly, expanding its existing U.S.-based research and development capability and finally, building upon its existing valuable U.S.-based intellectual property assets. Effective January 2018, this is expected to remain accretive to the company’s operational result in the fiscal fourth quarter.
Other Factors Likely to Influence ResMed's Q4
ResMed continues to progress on the back of its three-pronged growth strategy. In this regard, the company diligently aims at improvement in the adjacent product and geographic markets including homecare ventilation for Chronic Obstructive Pulmonary Disease, Amyotrophic Lateral Sclerosis and other respiratory disorders as well as the emerging markets of China, India and Brazil. ResMed still considers portable oxygen concentratorsan important addition to its menu of respiratory care products.
ResMed Inc. Price and EPS Surprise
ResMed Inc. Price and EPS Surprise | ResMed Inc. Quote
Moreover, since ResMed’s acquisition of Brightree in fiscal 2016, the former has strongly progressed with the latter’s software-as-a-service business and its latest offerings targeting the home health and hospice market. On fiscal third quarter’s earnings call, ResMed noted that Brightree systems handled more than 8.2 billion digital requests. We expect this upside to further sustain through the fourth quarter.
Here’s what the quantitative model predicts:
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP.
ResMed has a Zacks Rank #3 and an Earnings ESP of +3.97%, a combination indicative of the company’s likely earnings beat this reporting cycle.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other medical stocks worth considering with the right combination of elements to also beat on earnings this time around:
Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +2.05% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Baxter International Inc. (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
BioScrip, Inc. has an Earnings ESP of +3.22% and a Zacks Rank of 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>