Miss ResMed's earnings conference call yesterday? I didn't!


We don't always have the time (or, honestly, the wherewithal) to listen to every earnings conference call by every public company in the HME industry. But when we do, it's almost always worthwhile.

This week, ResMed had its earnings conference call for the second quarter ended Dec. 31, 2011. The company's earning looked something like this: It reported $332.7 million in revenue, a 9% increase compared to the same quarter in 2010. It reported a net income of $62.9 million, an 8% increase.

Also of note in the company’s earnings: ResMed reported research and development expenditures of $27.2 million for the quarter ended Dec. 31, a 24% increase compared to the same period in 2010.

Additionally, ResMed reported $647.5 million in revenue for the six months ended Dec. 31, a 10% increase compared to the same period in 2010. It reported a net income of $113.4 million, a 2% decrease.

Some of the more interesting discussions during these calls, whoever, come during the Q&A portion with investors at the end. Here are a few highlights:

Big spenders on R&D

ResMed officials explained that the company is making a push in the ventilator market (“they’re not cheap to produce”) and in the health informatics market. They called these two markets the company’s “two main gigs” in this area.

About that CEO succession plan…

ResMed officials explained that the search to replace Peter Farrell as CEO continues. The company is working with an outside recruiter and a consultant, but they’re not “rushing along” and they don’t expect to make an announcement in the near future.

The future is HST

ResMed officials expect the market for home sleep testing (HST) to double this year in the Americas, which means the market for auto-setting CPAP devices could also double. They say payers are “getting antsy” for sleep labs and others to adopt the technology, because it will save them money, to the tune of $1,000 per test. “We’re trying to put that story together and drive HST as part of that,” said Mick Farrell, president of ResMed Americas.

Expecting the worst, hoping for the best

ResMed officials have put together a team to look at a 2.3% annual excise tax on medical devices that’s scheduled to go info effect Jan. 1, 2013. They’re working on the assumption that it’s going to go through, but they say, “there’s a lot of water to flow under that bridge.”

Peter Farrell concluded the call by saying: “We continue to be excited about the future prospects for us. We’re in the right space. It’s preventative, improves quality of life and reduces healthcare costs.”

Liz Beaulieu