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Shares Fall After ResMed Announces Recall, Financial Results

ResMed Inc. shares sank more than 10 percent April 24 as the company recalled 300,000 of its machines used to help patients with breathing disorders, like sleep apnea.

The voluntary recall is costing the Poway-based company $59.7 million, which will be accounted for as a “cost to sales” in financial statements ending March 31.

Shares, traded on the New York Stock Exchange as RMD, fell nearly $5 mid-morning April 24 to $43.70. ResMed made its announcement after the market closed on April 23.

“To date, the problem of particular concern has been observed in only seven of approximately 300,000 early production (S8 flow generators),” said Chief Executive Officer Peter Farrell, in a press statement.

The problems, he said, potentially extend from faulty power supply connectors that ResMed purchased from a long-term supplier. The supplier was not named, and the company said that S8 devices produced after May 2006 are unaffected.

The same day, ResMed announced a $15.4 million net loss for the quarter ending March 31. In the same quarter in 2006, the firm saw a net income of $26.4 million.

ResMed reported revenue of $183 million during the quarter ended March 31, up from $162 million during the same quarter last year.

, Katie Weeks

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