Resmed Inc (NYSE:RMD) stock fell 3.36% (As on January 27, 11:47:42 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 23 as it boosted production to meet the demand created by Philips’ massive respiratory device recall. ResMed CEO Mick Farrell said earlier this month that the opening of a massive new plant in Singapore brought ResMed closer to catching up with skyrocketing CPAP demand. Looking at geographic revenue distribution and excluding revenue from the Software-as-a-Service business, sales in US, Canada, and Latin America countries increased by 26%. Sales in Europe, Asia, and other markets increased by 8% in constant currency terms.By product segment, globally, in constant currency terms, device sales increased by 25%, while masks and others sales increased by 13%. Breaking it down by regional areas, device sales in the US, Canada, and Latin America increased by 41% as the company has benefited from incremental revenue derived from the introduction of the Card-to-Cloud device and improving availability of the connected devices. Masks and other sales increased by 11%, reflecting solid ReSupply revenue. In Europe, Asia, and other markets, device sales increased by 5% in constant currency terms, reflecting the ongoing supply constraints in those markets for the connected devices.
Mask and other sales in Europe, Asia, and other markets increased by 14% in constant currency terms. Software-as-a-Service revenue, including revenue from the MediFoxDarn acquisition increased by 18% in the December quarter, driven by continued strong performance from the HME vertical. On an organic basis, SaaS revenue grew by 7% in the December quarter.
RMD in the second quarter of FY 23 has reported the adjusted earnings per share of $1.66, beating the analysts’ estimates for the adjusted earnings per share of $1.60, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 16 percent to $1.03 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $997.4 million. Revenue growth reflected increased demand for the sleep products across the portfolio and ongoing increase device demand generated by our competitors’ product recall. Year-on-year movements in foreign currencies, in particular, the weaker euro negatively impacted revenue by approximately $36 million this quarter. The company has closed the MediFoxDarn acquisition on November 21, 2022 and accordingly, the company have recognized MediFoxDarn revenue of $10.7 million in the Q2 FY 2023 results from this date.
Meanwhile, ResMed announced that Mick Farrell will take over for his father, Peter Farrell, as chair of the company’s board of directors.