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Masimo (MASI) Beats Q2 Earnings, Revenues; FY16 View Up
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Masimo Corp (MASI - Free Report) reported earnings of 57 cents per share in the second quarter of 2016, which surged 58% from the year-ago quarter. Including an 8-cent impact from the new stock option gain accounting rule -- ASU 2016-09 -- earnings were 49 cents per share that beat the Zacks Consensus Estimate by 8 cents.
Revenues improved almost 11% year over year to $172.6 million, well ahead of the Zacks Consensus Estimate of $166 million. We note that product revenues increased 11.5% (11.1% at constant currency) to $164.6 million in the quarter, while revenues from royalty decreased 1% to $8 million.
Quarter Details
Worldwide direct product revenues (86% of product revenues) increased 12.7% to $140.9 million. OEM sales (14.4% of product revenues) rose 5.1% to $23.7 million from the year-earlier quarter. In the product category, Masimo primarily benefited from new customer additions in international markets.
Masimo rainbow revenues advanced 10.6% from the year-ago quarter to $14.9 million. However, SpHb revenues declined to $3.6 million from $4.4 million in the prior-year quarter. During the quarter, SET pulse oximetry and rainbow Pulse CO-Oximetry unit shipments (excluding handheld units) totaled 45300.
U.S. product revenues surged 10.2% to $117 million compared with $106.2 million in the prior-year quarter. International product revenues, which represented 29% of total product revenues, increased 15% from the year-ago quarter to $47.6 million (up 13.6% at constant currency).
Notably, Masimo won two noteworthy product clearances from the U.S. Food and Drug Administration (FDA) in the reported quarter. The first sanction came for O3 Regional Oximetry monitor that fortified the company’s position in the market worth $125 million. Radius-7 monitor (with rainbow measurement capabilities) is the other product that received a go-ahead.
Margin Details
Gross margin expanded 60 basis points (bps) to 66.7% in the quarter, primarily buoyed by a stellar performance by the product category.
Operating expenses, as a percentage of revenues, decreased 260 bps in the reported quarter. Notably, selling, general and administrative expenses also contracted 260 bps while expenses on research and development remained flat year over year.
Operating margin expanded 320 bps on a year-over-year basis. Notably, the upside can be attributable to solid product revenue growth and stringent measures for controlling operating expenses.
Guidance
For full-year 2016, Masimo projects total revenues of $689 million, up from the previous projection of $677 million.
Product revenues are expected at around $658 million, up from the previous guidance of $647 million. Meanwhile, Royalty revenue projection is maintained at $31 million, up from the previous $30 million.
Masimo forecasts gross margin of approximately 65%, up from the prior guidance of 64.7%. Management expects operating expenses of approximately $314 million, which is also slightly above the previous guidance of $312 million.
Masimo now projects earnings of $2.01 per share, up from the earlier projected figure of $1.83.
Zacks Rank and Other Key Picks
Currently, Masimo carries a Zacks Rank #1 (Strong Buy).
Better-ranked stocks in the medical space are Cepheid , Natus Medical Inc. and Mesa Laboratories Inc. (MLAB - Free Report) . All the stocks sport a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Masimo (MASI) Beats Q2 Earnings, Revenues; FY16 View Up
Masimo Corp (MASI - Free Report) reported earnings of 57 cents per share in the second quarter of 2016, which surged 58% from the year-ago quarter. Including an 8-cent impact from the new stock option gain accounting rule -- ASU 2016-09 -- earnings were 49 cents per share that beat the Zacks Consensus Estimate by 8 cents.
Revenues improved almost 11% year over year to $172.6 million, well ahead of the Zacks Consensus Estimate of $166 million. We note that product revenues increased 11.5% (11.1% at constant currency) to $164.6 million in the quarter, while revenues from royalty decreased 1% to $8 million.
Quarter Details
Worldwide direct product revenues (86% of product revenues) increased 12.7% to $140.9 million. OEM sales (14.4% of product revenues) rose 5.1% to $23.7 million from the year-earlier quarter. In the product category, Masimo primarily benefited from new customer additions in international markets.
Masimo rainbow revenues advanced 10.6% from the year-ago quarter to $14.9 million. However, SpHb revenues declined to $3.6 million from $4.4 million in the prior-year quarter. During the quarter, SET pulse oximetry and rainbow Pulse CO-Oximetry unit shipments (excluding handheld units) totaled 45300.
U.S. product revenues surged 10.2% to $117 million compared with $106.2 million in the prior-year quarter. International product revenues, which represented 29% of total product revenues, increased 15% from the year-ago quarter to $47.6 million (up 13.6% at constant currency).
Notably, Masimo won two noteworthy product clearances from the U.S. Food and Drug Administration (FDA) in the reported quarter. The first sanction came for O3 Regional Oximetry monitor that fortified the company’s position in the market worth $125 million. Radius-7 monitor (with rainbow measurement capabilities) is the other product that received a go-ahead.
Margin Details
Gross margin expanded 60 basis points (bps) to 66.7% in the quarter, primarily buoyed by a stellar performance by the product category.
MASIMO CORP Price, Consensus and EPS Surprise
MASIMO CORP Price, Consensus and EPS Surprise | MASIMO CORP Quote
Operating expenses, as a percentage of revenues, decreased 260 bps in the reported quarter. Notably, selling, general and administrative expenses also contracted 260 bps while expenses on research and development remained flat year over year.
Operating margin expanded 320 bps on a year-over-year basis. Notably, the upside can be attributable to solid product revenue growth and stringent measures for controlling operating expenses.
Guidance
For full-year 2016, Masimo projects total revenues of $689 million, up from the previous projection of $677 million.
Product revenues are expected at around $658 million, up from the previous guidance of $647 million. Meanwhile, Royalty revenue projection is maintained at $31 million, up from the previous $30 million.
Masimo forecasts gross margin of approximately 65%, up from the prior guidance of 64.7%. Management expects operating expenses of approximately $314 million, which is also slightly above the previous guidance of $312 million.
Masimo now projects earnings of $2.01 per share, up from the earlier projected figure of $1.83.
Zacks Rank and Other Key Picks
Currently, Masimo carries a Zacks Rank #1 (Strong Buy).
Better-ranked stocks in the medical space are Cepheid , Natus Medical Inc. and Mesa Laboratories Inc. (MLAB - Free Report) . All the stocks sport a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>