ResMed Earnings: Solid Result With Strong Mask Sales and Gross Margin Expansion

Shares in narrow-moat ResMed remain undervalued following a solid fourth-quarter fiscal 2024. Underlying EBIT of USD 400 million was 2% higher than third-quarter fiscal 2024, with sales up 2% on increased product demand and underlying EBIT margin largely maintained at 33%, down 14 basis points. Gross margin was a highlight, expanding 62 basis points sequentially to 59% on favorable product mix and manufacturing cost improvements, but the benefit to operating margins was offset by operating cost growth. Fiscal 2024 revenue and earnings met our forecasts, and we leave our long-term estimates largely unchanged.