ResMed Inc. (RMD), CareFusion Corporation (CFN) – A Healthcare Stock With an Interesting Value Proposition, Part Two

In the quarter that ended June 30, health care sales were flat at constant currency at $3.1 billion (2.36 billion euros). This was due to 3% decline in sales from North America and Western Europe, partly offset by 10% year over year growth in sales from China and Latin America.

Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) has seen order in its health care sector grow strongly, and expects to see further upside in 2014. This year, it is enhancing its global reach by partnering with hospitals in Saudi Arabia, the Netherlands, and the U.S. to supply patient monitoring and other equipment.

Another smaller competitor is CareFusion Corporation (NYSE:CFN). It has respiratory products, cardiopulmonary diagnostics, sleep diagnostic, and therapy and ventilators. In the quarter that ended March 31, CareFusion Corporation (NYSE:CFN) reported revenue of $901 million, down 2% at constant currency, compared to $919 million same period last year. The decrease was due to declining sales of both medical systems and procedural solutions.

Within medical systems, respiratory technologies decreased 8% to $97 million in 3Q, 2013, compared to $106 million in 3Q, 2012. The company’s adjusted operating income increased 5% to $201 million, and adjusted EPS was $0.59, up 6%, compared to $0.56 in the same period last year.

CareFusion Corporation (NYSE:CFN) has announced a $750 million share repurchase program for 2014. This comes on back of a successful share repurchase of $400 million after it announced a buyback program for up to $500 million last year. The company is also entering into contracts with University of Texas MD Anderson Cancer Center, Ochsner Health System, Our Lady of the Lakes Medical Center, and more than 100 other hospitals for new technologies on the Pyxis ES platform.

Going ahead
ResMed Inc. (NYSE:RMD) aims to offer support systems for patients with congestive heart disease as more than 76% of the cases are caused due to moderate to severe OSA. By performance, ResMed has showed significant sales growth, mostly driven by increasing demand for SDB systems in chronic medical conditions. Its strong financial position and solid dividend policy should support its earnings potential in the future.

The article A Healthcare Stock With an Interesting Value Proposition, Part 2 originally appeared on Fool.com and is written by Kanak Kanti, De.

Kanak Kanti De has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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