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Masimo (MASI) Earnings and Revenues Beat Estimates in Q3

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Masimo Corporation (MASI - Free Report) reported third-quarter 2020 adjusted earnings per share (EPS) of 80 cents, which surpassed the Zacks Consensus Estimate of 56 cents by 42.9%. Earnings improved 5.3% from the year-ago quarter.

Total revenues (including Royalty) improved 21.4% year over year to $278.1 million and beat the Zacks Consensus Estimate of $275 million by 1.1%.

Segmental Analysis

Product Revenues

Product revenues in the third quarter totaled $278.1 million, up 21.5% from the year-ago quarter and 21.1% at constant currency (cc).

Per management, shipments of non-invasive technology boards and instruments (excluding handheld and fingertip pulse oximeters) surged 150% to 151,700 in the quarter.

Margin Analysis

In the quarter under review, gross profit totaled $178.9 million, up 14.5% year over year. Gross margin was 64.3%, down 390 basis points (bps).

Total operating costs totaled $119.2 million, up 13.9%.

Operating profit in the quarter totaled $59.7 million, up 15.6% from a year ago.  Operating margin contracted 108 bps to 21.5% in the quarter.

Cash Position

The company exited the third quarter with cash and cash equivalents of $669.1 million, compared with $631.9 million at the end of the second quarter. Cumulative net cash provided by operating activities came in at $146.5 million, compared with $151.4 million in the year-ago period.

Masimo Corporation Price, Consensus and EPS Surprise

 

Masimo Corporation Price, Consensus and EPS Surprise

Masimo Corporation price-consensus-eps-surprise-chart | Masimo Corporation Quote

2020 Guidance

Total revenues are projected at $1.13 billion. The Zacks Consensus Estimate is pegged at $1.13 billion. Adjusted EPS is projected at $3.46. The Zacks Consensus Estimate for the same is pegged at $3.04.

In Conclusion

Masimo exited the third quarter on a strong note. The company continues to gain from its key Product segment, which witnessed solid growth in the quarter under review. The company’s non-invasive technology shipments also surged in the quarter. In fact, management foresees increased shipments for the quarters ahead. The recent launch of the Masimo SafetyNet, designed to help fight the coronavirus pandemic, continues to buoy optimism. The outbreak has boosted demand for the company’s products among direct and OEM customers.

On the flip side, contraction of both margins is a concern. Masimo’s Royalty and Other segment saw no contribution during the quarter. Further, the company faces fierce competition from MedTech bigwigs.

Zacks Rank & Other Key Picks

Currently, Masimo carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks yet to report earnings include Insulet Corporation (PODD - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Quidel Corporation (QDEL - Free Report) .

The Zacks Consensus Estimate for Insulet’s third-quarter 2020 adjusted EPS is currently pegged at 6 cents. The consensus estimate for third-quarter revenues stands at $220.89 million. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IDEXX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2020 adjusted EPS is currently pegged at $1.41. The consensus estimate for third-quarter revenues stands at $666.7 million.

The Zacks Consensus Estimate for Quidel’s third-quarter 2020 revenues is pegged at $476.1 million, suggesting a year-over-year improvement of 276.4%. The same for EPS stands at $4.58, indicating growth of 554.3% from the year-ago reported figure. The company currently sports a Zacks Rank #1.

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