For the past 18 months, ResMed Chief Executive Mick Farrell has been publicly outspoken in urging that medical devices get priority access to semiconductors amid global chip shortages coming out of the pandemic.
Now, with macro-economic headwinds slowing demand for certain consumer electronics, the bottleneck of chips available for medical devices, such as ResMed's connected sleep apnea machines and ventilators, has begun to ease.
And the results showed up in the San Diego company's top-line financial performance last quarter.
ResMed rung up sales of $1.03 billion for its fiscal second quarter ended Dec. 31. It is the first time that quarterly revenue has topped $1 billion in ResMed's 33-year history.
"We are making steady progress with our suppliers and continue to increase our production to ultimately meet the needs of all customers, and especially patients," said Farrell on a conference call with Wall Street analysts.
In mid-2021, rival sleep apnea device maker Philips recalled millions of sleep apnea machines and certain ventilators, sparking strong demand for ResMed's products.
The company invested to boost production at factories in Australia and Singapore, but shipping bottlenecks and chip shortages hamstrung its ability to meet demand. Wireless chips that send data from sleep apnea and other breathing devices to the Internet cloud as part of care management programs were particularly difficult to source.
Farrell and others in the med-tech industry lobbied suppliers and government officials to push medical devices to the front of the line, even though the volume of chips they buy is small compared with quantity required by consumer electronics gear makers. The medical device industry supported passage of the $52 billion Chips and Science Act last summer, which aims to increase domestic production of semiconductors.
"We see the supply environment improving every week, every month and every quarter, and our access to specific electronic components that we need has increased," said Farrell. He expects any lingering shortages to be over by year end.
ResMed's quarterly revenue increased 16 percent over the same quarter a year earlier — lead by sales growth in the Americas.
Net income came in at $225 million, or $1.53 per share, under Generally Accepted Accounting Principles. That's up 13 percent over the same quarter a year ago.
ResMed released results Thursday after markets closed. Its shares ended trading Friday down 3 percent at $224.59 on the New York Stock Exchange.
