Flow generator sales growth was very strong (+26%), but I sense...

Flow generator sales growth was very strong (+26%), but I sense the market already knew and expected this, as the good traction of the new product launches last year (Airsense 10) had been well flagged.

The thing I suspect the market will focus on will be the sluggish mask growth numbers (down 1%), driven by ongoing pricing pressure which is having an impact on the Gross Margin.

The weak Euro is also not helping Gross Margin, which - at 59.5%, - while still high was down almost 300 bp, and below management's earlier expectations of 61%.

I suspect the stock will be down today, by around 3%, maybe 4%.

But that's what you get with quarterly reporting, it can be a bit lumpy.

The thing to bear in mind when it comes to investing in RMD is the fact that in just about every quarter there is some aspect of the result that is less-than-perfect (for example, this time last year the problem was that the top line growth was sluggish, while the Gross Margin was very high (~63%) ), but the ongoing wealth creation of the business in terms of its long-term earnings growth is almost without peer, and there is nothing going on in the industry in which RMD operates (technological, competitor, regulatory, need) that will change that.