By Padmanabhan Ananthan and Kunal Das
Aug 7 (Reuters) – Shares of ResMed dropped about 6% in morning trade on Friday after the medtech company forecast fiscal 2027 revenue below Wall Street expectations, impacted by suspended ventilator sales and cost pressures.
ResMed said it would suspend sales of its Astral ventilators, used by patients who require acute or long-term life-support, following a device correction and FDA recall tied to five serious injuries last week.
The fresh guidance assumes no sales of Astral ventilators during fiscal 2027 and factors in an expected $75 million impact due to the suspension, as the company redirects scarce electronic components to support repairs and servicing of existing devices. ResMed said it has not yet decided whether Astral sales will resume in fiscal 2028.
The company now expects fiscal 2027 revenue of $5.75 billion to $5.85 billion, below analysts’ expectations of $5.92 billion, according to data compiled by LSEG.
Emerging competitive and ongoing cost pressures also limit its growth outlook, Baird analyst David Rescott said.
ResMed, which makes devices to manage sleep apnea, among other medical equipment, plans to increase prices during fiscal 2027 as rising costs for electronic components and freight pressure its margins.
“We can no longer offset inflation with productivity alone,” CFO Aaron Bloomer said on a call with analysts.
ResMed’s sleep apnea devices face competition from Eli Lilly’s weight-loss drug Zepbound, which was approved by the FDA in 2024 to treat obstructive sleep apnea. While the condition can affect anyone, it is more common in people who are overweight or obese, according to the health regulator.
But Morningstar analysts said the Apple Watch’s ability to identify possible sleep apnea cases could drive more diagnoses and treatment, which could help counter the weight-loss-drug threat to ResMed’s devices. Sleep apnea devices are still the standard of care on the market and widely used.
ResMed reported fourth-quarter adjusted profit of $2.95 per share, topping estimates of $2.89, while revenue rose 9% to $1.46 billion, in line with expectations.
(Reporting by Kunal Das and Padmanabhan Ananthan in Bengaluru; Editing by Jonathan Ananda)
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