ResMed Inc. RMD announced fourth-quarter fiscal 2016 adjusted earnings per share (EPS) of 74 cents, up 8.8% from the prior-year quarter. Earnings came in line with the Zacks Consensus Estimate. Year-over-year bottom-line growth was primarily driven by a double-digit increase in revenues.
Including one-time items, ResMed reported EPS of 59 cents in the quarter, down 3.3% year over year.
For fiscal 2016, the company reported adjusted EPS of $2.68, up 4.3% from the year-ago level. Fiscal 2016 earnings also beat the Zacks Consensus Estimate by a penny.
Moreover, during the fourth quarter, ResMed adopted ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting", which enabled the company to enjoy additional income tax benefits of $1.3 million in fiscal 2016 and $11.2 million in the fourth quarter. However, the benefits associated with the adoption of the standard was largely offset by an additional tax expense incurred in the fourth quarter related to an increase in the company’s foreign cash repatriation to the U.S.
Revenue in Details
Revenues in the reported quarter increased 14% year over year (up 15% at constant exchange rate or CER) to $518.6 million and comfortably outpaced the Zacks Consensus Estimate of $508 million. Excluding the contribution from the Brightree acquisition, second-quarter revenues improved 8% to $489.7 million.
On a geographic basis, revenues in the Americas rose 19% year over year to $324.5 million, which included contributions of $28.9 million from the Brightree acquisition. Excluding the same, revenues in the Americas were up 8% to $295.6 million. On the other hand, sales in the combined EMEA and APAC region improved 8% at CER to $194.1 million.
In fiscal 2016, the company generated revenues of $1.84 billion, exhibiting a year-over-year improvement of 10% (up 13% at CER). Reported revenues also breezed past the Zacks Consensus Estimate of $1.83 billion.
RESMED INC Price, Consensus and EPS Surprise
RESMED INC Price, Consensus and EPS Surprise | RESMED INC Quote
Operational Update
ResMed's gross margin was 58.1% in the reported quarter, reflecting an 80 basis point (bps) yea-over-year expansion, on account of manufacturing and procurement efficiencies, and an incremental contribution from the Brightree acquisition, which offset changes in product mix and declines in average selling prices.
Selling, general and administration (SG&A) expenses rose 9% (up 10% at CER) to $133.9 million, while research and development (R&D) expenses increased 21% (up 24% at CER) to $34.4 million.