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ResMed (RMD) to Report Q3 Earnings: What's in the Offing?

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ResMed Inc. IART is scheduled to report third-quarter fiscal 2021 results on Apr 29, after the opening bell.

In the last reported quarter, the company’s earnings of $1.41 surpassed the Zacks Consensus Estimate by 15.6%. Over the trailing four quarters, its earnings beat the Zacks Consensus Estimate on three occasions and missed on one, with the average surprise being 27.8%.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Sleep and Respiratory Care

Similar to the prior quarter, ResMed is well poised to gain from improvement in demand for the company’s mask and other accessories line. Over the pandemic, the company’s revenues in the domestic and international front registered strong growth on stupendous demand for its critical care products like masks and accessories. With the health situation remaining more-or-less unchanged, this trend is expected to have been continued in the to-be-reported quarter.

The Zacks Consensus Estimate for Mask and Other Accessories revenues is pegged at $316 million, suggesting an improvement of 14.1% from the year-ago quarter.

ResMed Inc. Price and EPS Surprise

ResMed Inc. Price and EPS Surprise
ResMed Inc. Price and EPS Surprise

ResMed Inc. price-eps-surprise | ResMed Inc. Quote

During the second-quarter fiscal 2021 earnings call in January, ResMed noted that patient diagnosis trends in sleep apnea, COPD and asthma are steadily increasing. Moreover, the company continues to witness strong patient flow coming from the United States and other countries. These are expected have contributed to third-quarter fiscal 2021 revenue growth on growing global prominence of critical respiratory illnesses amid the current crisis.

We are also upbeat about continued rapid adoption of ResMed’s AirView for ventilation software solution launched in Europe at the peak of the COVID-19 crisis. We expect this adoption to have continued in the third quarter as well.

The Zacks Consensus Estimate for domestic Total Sleep and Respiratory Care revenues is pegged at $707 million, calling for an improvement of 3.9% from the year-ago quarter.

SaaS

ResMed’s Software as a Service business (SaaS) is expected to have seen growth in the fiscal third quarter on the continued strong uptake of Brightree HME resupply solutions. The company’s partnership with MatrixCare and Cerner is also progressing well. We expect these collaborations to have driven third-quarter growth as well.

Furthermore, during the fiscal-second-quarter earnings call, ResMed noted that the weighted average market growth rate of the company’s portfolio of out-of-hospital care settings is expected to accelerate growth in fiscal 2021. We expect part of this projected growth to get reflected in third-quarter results.

The Zacks Consensus Estimate for SaaS business revenues is pegged at $95 million, suggesting growth of 5.6% from the year-ago quarter.

Estimate Picture

For third-quarter fiscal 2021, the Zacks Consensus Estimate for total revenues of $781.9 million implies growth of 1.6% from the prior-year reported figure.

The consensus estimate for earnings per share is pegged at $1.22, indicating a decline of 5.4% from the prior-year reported figure.

What Our Model Suggests

Our proven model does not conclusively predict an earnings beat for ResMed this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: ResMed has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

Elanco Animal Health Incorporated ELAN currently has a Zacks Rank #1 and an Earnings ESP of +1.90%. You can see the complete list of today’s Zacks #1 Rank stocks here.

HCA Healthcare, Inc. HCA has an Earnings ESP of +8.91% and a Zacks Rank of 2, at present.

Avenue Therapeutics, Inc. ATXI has an Earnings ESP of +16.67% and aZacks Rank of 2, at present.

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Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report

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