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Masimo (MASI) Q3 Earnings Top Estimates, 2022 View Revised
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Masimo Corporation (MASI - Free Report) delivered adjusted earnings per share (EPS) of $1.00 for the third quarter of 2022, up 6.4% year over year. The figure surpassed the Zacks Consensus Estimate by 8.7%.
The adjustments include acquisition, integration and related costs, and acquired intangible asset amortization expenses, among others.
GAAP EPS for the quarter was 70 cents, down 30% from the year-earlier figure.
Revenues in Detail
Masimo registered revenues of $549.3 million in the third quarter, up 78.7% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 2.9%.
Per management, the year-over-year uptick in revenues was primarily driven by strength in its healthcare business.
Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 76,100 in the third quarter of 2022.
Segmental Details
Masimo derives its revenues from two business sources — healthcare and non-healthcare.
Healthcare revenues in the third quarter were $327.2 million, representing growth of 6.4% on a reported basis and 10% at constant exchange rate (CER).
Non-healthcare revenues in the third quarter were $222.1 million.
Masimo Corporation Price, Consensus and EPS Surprise
In the quarter under review, Masimo’s gross profit rose 38.8% to $282.5 million. Gross margin contracted a huge 1480 basis points (bps) to 51.4%.
Selling, general & administrative expenses jumped 73.6% to $174.6 million. Research and development expenses went up 50% year over year to $53.1 million. Total operating expenses of $227.7 million increased 67.4% year over year.
Total operating profit amounted to $54.8 million, reflecting an 18.9% decline from the prior-year quarter. The operating margin in the third quarter contracted a huge 1201 bps to 9.9%.
Financial Position
Masimo exited third-quarter 2022 with cash and cash equivalents of $219.5 million compared with $218 million at the end of the second quarter. Long-term debt at the end of the third quarter was $951.4 million compared with $922.4 million at the end of the second quarter.
Cumulative net cash flow from operating activities at the end of third-quarter 2022 was $36 million compared with $167.1 million a year ago.
2022 Guidance
Masimo has revised its full-year 2022 financial outlook and provided projections for the fourth quarter.
For the full year, total revenues are now projected to be in the range of $2,000 million to $2,030 million, narrowed from the earlier projections of $1,985 million to $2,045 million. The Zacks Consensus Estimate for the metric is currently pegged at $2.02 billion.
Healthcare revenues are now expected to lie within $1,325 million to $1,340 million, lowered from the earlier projections of $1,330 million to $1,345 million.
Non-healthcare revenues for the year are now estimated to be within $675 million to $690 million compared with the earlier projections of $655 million to $700 million.
Adjusted EPS for 2022 is now projected to be within $4.38-$4.49, narrowed from the earlier projections of $4.34-$4.57. The Zacks Consensus Estimate for the same is pegged at $4.47.
For the fourth quarter of 2022, Masimo expects its total revenues in the range of $581 million to $611 million (reflecting 6-11% growth at CER). The Zacks Consensus Estimate for the metric is currently pegged at $616.2 million.
Healthcare revenues are expected to be within $337 million to $352 million (reflecting 7-11% growth at CER), whereas non-healthcare revenues are likely to be within $245 million to $260 million (reflecting 5-10% growth at CER) for the quarter.
Adjusted EPS for the fourth quarter is projected to be within $1.11-$1.22. The Zacks Consensus Estimate for the same is pegged at $1.27.
Our Take
Masimo exited the third quarter of 2022 with better-than-expected results. The robust uptick in the top line and its healthcare business is encouraging. The company recorded robust order shipments during the reported quarter, which is encouraging. The expansion of the company’s installed base is also impressive. The full market release of the Masimo W1 health watch for consumer use in August is also promising. A slew of favorable studies on Masimo’s products and enhancement to its telehealth capabilities are also promising.
On the flip side, the company continues to operate in an unstable macroeconomic environment, including supply-chain challenges, hospital staffing shortages and slowing hospital admissions, which raises our apprehension. The contraction of both margins in the quarter does not bode well. Masimo faces fierce competition from MedTech bigwigs, which is another area of concern.
Zacks Rank & Stocks to Consider
Masimo currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $2.57, which beat the Zacks Consensus Estimate by 10.3%. Revenues of $1.14 billion outpaced the consensus mark by 3.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 10.9%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Masimo (MASI) Q3 Earnings Top Estimates, 2022 View Revised
Masimo Corporation (MASI - Free Report) delivered adjusted earnings per share (EPS) of $1.00 for the third quarter of 2022, up 6.4% year over year. The figure surpassed the Zacks Consensus Estimate by 8.7%.
The adjustments include acquisition, integration and related costs, and acquired intangible asset amortization expenses, among others.
GAAP EPS for the quarter was 70 cents, down 30% from the year-earlier figure.
Revenues in Detail
Masimo registered revenues of $549.3 million in the third quarter, up 78.7% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 2.9%.
Per management, the year-over-year uptick in revenues was primarily driven by strength in its healthcare business.
Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 76,100 in the third quarter of 2022.
Segmental Details
Masimo derives its revenues from two business sources — healthcare and non-healthcare.
Healthcare revenues in the third quarter were $327.2 million, representing growth of 6.4% on a reported basis and 10% at constant exchange rate (CER).
Non-healthcare revenues in the third quarter were $222.1 million.
Masimo Corporation Price, Consensus and EPS Surprise
Masimo Corporation price-consensus-eps-surprise-chart | Masimo Corporation Quote
Margin Analysis
In the quarter under review, Masimo’s gross profit rose 38.8% to $282.5 million. Gross margin contracted a huge 1480 basis points (bps) to 51.4%.
Selling, general & administrative expenses jumped 73.6% to $174.6 million. Research and development expenses went up 50% year over year to $53.1 million. Total operating expenses of $227.7 million increased 67.4% year over year.
Total operating profit amounted to $54.8 million, reflecting an 18.9% decline from the prior-year quarter. The operating margin in the third quarter contracted a huge 1201 bps to 9.9%.
Financial Position
Masimo exited third-quarter 2022 with cash and cash equivalents of $219.5 million compared with $218 million at the end of the second quarter. Long-term debt at the end of the third quarter was $951.4 million compared with $922.4 million at the end of the second quarter.
Cumulative net cash flow from operating activities at the end of third-quarter 2022 was $36 million compared with $167.1 million a year ago.
2022 Guidance
Masimo has revised its full-year 2022 financial outlook and provided projections for the fourth quarter.
For the full year, total revenues are now projected to be in the range of $2,000 million to $2,030 million, narrowed from the earlier projections of $1,985 million to $2,045 million. The Zacks Consensus Estimate for the metric is currently pegged at $2.02 billion.
Healthcare revenues are now expected to lie within $1,325 million to $1,340 million, lowered from the earlier projections of $1,330 million to $1,345 million.
Non-healthcare revenues for the year are now estimated to be within $675 million to $690 million compared with the earlier projections of $655 million to $700 million.
Adjusted EPS for 2022 is now projected to be within $4.38-$4.49, narrowed from the earlier projections of $4.34-$4.57. The Zacks Consensus Estimate for the same is pegged at $4.47.
For the fourth quarter of 2022, Masimo expects its total revenues in the range of $581 million to $611 million (reflecting 6-11% growth at CER). The Zacks Consensus Estimate for the metric is currently pegged at $616.2 million.
Healthcare revenues are expected to be within $337 million to $352 million (reflecting 7-11% growth at CER), whereas non-healthcare revenues are likely to be within $245 million to $260 million (reflecting 5-10% growth at CER) for the quarter.
Adjusted EPS for the fourth quarter is projected to be within $1.11-$1.22. The Zacks Consensus Estimate for the same is pegged at $1.27.
Our Take
Masimo exited the third quarter of 2022 with better-than-expected results. The robust uptick in the top line and its healthcare business is encouraging. The company recorded robust order shipments during the reported quarter, which is encouraging. The expansion of the company’s installed base is also impressive. The full market release of the Masimo W1 health watch for consumer use in August is also promising. A slew of favorable studies on Masimo’s products and enhancement to its telehealth capabilities are also promising.
On the flip side, the company continues to operate in an unstable macroeconomic environment, including supply-chain challenges, hospital staffing shortages and slowing hospital admissions, which raises our apprehension. The contraction of both margins in the quarter does not bode well. Masimo faces fierce competition from MedTech bigwigs, which is another area of concern.
Zacks Rank & Stocks to Consider
Masimo currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $2.57, which beat the Zacks Consensus Estimate by 10.3%. Revenues of $1.14 billion outpaced the consensus mark by 3.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 10.9%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.