INVESTORS in ResMed will be having sweet dreams after the sleep...

INVESTORS in ResMed will be having sweet dreams after the sleep management company increased its annual profit by two-thirds on improved US sales, sending its shares up 14 per cent.

ResMed, which is listed in Australia but based in the US, said market enthusiasm for its new products, and helpful changes to regulations and insurance policies, positioned it well to deliver strong growth in the next year.

Net profit in the year to June 30 beat expectations by jumping 66 per cent to $US110.3 million ($A120.18 million), despite a weak US dollar pushing up costs.

Fourth-quarter earnings rose 7.1 per cent to $US29.63 million as quarterly revenue surged 23 per cent to a record $US235.2 million.

"We were pleased with the strong and balanced growth achieved by our global operations in the past quarter, particularly the accelerated growth experienced in the US market," chief executive Kieran Gallahue said.

ResMed shares had been buffeted by disappointing sales results in America, amid soft pricing by competitors.

Yesterday's better results drove ResMed stock up 57c, or 14.14 per cent, to end at $4.60, but it is still down 22 per cent for the year.

Mr Gallahue said ResMed was encouraged by the traction gained by the release of a new series of flow generators and nasal pillow masks, which provide positive air pressure to the upper airway during sleep.

"Our industry received positive signals that it is poised for continued growth," he said. Such signals included favourable US Medicare rulings and updated private insurance policies related to sleep disorders.

In June, the US Congress delayed the implementation of Medicare competitive bidding for 18 to 24 months, meaning payment for medical items would remain set by a government system of pricing, rather than by competitive market forces.

ResMed moved recently into the diabetes market and Mr Gallahue said the International Diabetes Federation published an important consensus statement on sleep apnea and diabetes.

The diabetes community now had an official recommendation to screen all Type 2 diabetes patients suspected of sleep apnea, he said.