(Reuters) - Medical device maker ResMed reported weaker first-quarter margins on Thursday as steep costs overshadowed a 16% rise in sales, sending its shares down more than 5% in extended trading.
ResMed makes continuous-positive-airway-pressure machines (CPAP) to treat sleep apnea, a condition where the airway gets repeatedly blocked while sleeping.
Its gross margin decreased to 54.4% from 56.9% a year earlier, pressured by higher component and manufacturing costs, among other factors.
Revenue for the September quarter rose 16% to $1.1 billion, largely in line with analysts' estimates, according to LSEG data. Adjusted profit of $1.64 per share came in above expectations of $1.62.
ResMed's net income was $219.4 million and diluted earnings per share was $1.49, both up 4% from the prior year.
The California-based company's sleep apnea machines are expected to face a hit from GLP-1 drugs, which are currently approved for diabetes and weight loss, but are also being tested to treat sleep apnea.
U.S. companies across sectors such as food and beverage makers and manufacturers of glucose monitors have faced investor questions over the risk to future sales from the growing popularity of promising weight-loss treatments.
ResMed CEO Michael Farrell had said that he did not expect weight-loss drugs to have a major impact on the company's future sales because the treatment is harsh and its cost would discourage many patients from taking it long-term.
Rival Philips on Monday flagged a fall in new orders as supply chain problems persisted and demand from China continued to cool from a pre-pandemic boom.
(Reporting by Vaibhav Sadhamta in Bengaluru; Editing by Devika Syamnath)