Earnings: ResMed up, AHP down

SAN DIEGO and BRENTWOOD, Tenn. - ResMed increased revenues 50% to $162.3 million for the first quarter of 2006 compared to the same quarter last year, the sleep manufacturer reported May 4. Net income increased 59% to $30.1 million for the first quarter of 2006 compared to the same quarter in 2005, excluding stock-based compensation costs. General and administrative costs were $50.1 million for the first quarter of 2006, an increase of $15.6 million, or 45%, over the same period the previous year. The increase was due to acquisitions, additional sales and administration personnel, and infrastructure investments in Europe. Research and development spending for the first quarter of 2006 was $8.7 million, excluding stock-based compensation costs. "We remain encouraged with the progress we continue to make in targeting sleep-disordered breathing in heart failure, as well as in other co-morbidities," stated Peter Farrell, chairman and CEO, in a company release. "It is particularly encouraging for us to note that various affected medical specialties are gradually waking up to sleep and the impact that untreated sleep-disordered breathing is having on specific illnesses." Also on May 4, American HomePatient joined a growing number of public HME providers to report disappointing first quarter earnings due to Medicare reimbursement changes, particularly for inhalation drugs and oxygen. AHP's revenues dropped to $80.5 million for the first quarter of 2006 compared to $81.5 million for the same quarter the previous year. Without the reimbursement changes, revenues would have increased about $3.2 million for the first quarter of 2006. AHP reported a net loss of $700,000 for the first quarter of 2006 compared to a net income of $1.2 million for the same quarter the previous year--a decrease of $1.9 million or 158%.