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Masimo (MASI) Beats on Q3 Earnings, Revenues; Guides Up

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Masimo Corp. (MASI - Free Report) reported earnings of 47 cents per share in the third quarter of 2016, which increased from 36 cents in the year-ago quarter. The figure also came above the Zacks Consensus Estimate of 42 cents.

Revenues improved almost 9.9% year over year to $167.6 million, well ahead of the Zacks Consensus Estimate of $166 million. We note that product revenues increased 10.8% to $160.3 million in the quarter.

Quarter Details

Worldwide direct product revenues (85.7% of product revenues) increased 14.3% to $137.4 million. OEM sales (14.3% of product revenues) fell 6.1% to $22.9 million from the year-earlier quarter. Revenue from sales of Masimo rainbow products rose 5.0% year over year to $18.0 million.

During the reported quarter, the company shipped approximately 45,800 SET Pulse Oximeters and rainbow SET Pulse CO-Oximeters, excluding handheld units. Per company estimation, its worldwide installed base as of Oct 1, 2016 was 1,482,000 units, up 6.6% from 1,390,000 units as of Oct 3, 2015.

Financial Condition

As of Oct 1, 2016, total cash and cash investments were $126.0 million compared with $132.3 million as of Jan 2, 2016. During the nine-month period ending Oct 1, 2016, the company generated $87.8 million in cash from operations and received $26.1 million in proceeds from stock option exercises. During the same nine-month period, the company repurchased 1.5 million shares at a total cost of $63.4 million and made $77.5 million in repayments on the company’s line-of-credit.


For 2016, Masimo raised the total revenue guidance to approximately $692 million from $689 million expected previously.

Product revenues are expected at around $661 million, up from the previous guidance of $658 million. Meanwhile, Royalty revenue projection was raised to $31 million from the previous $30 million.

Masimo now projects earnings of $2.13 per share, up from the earlier projected figure of $2.01.

MASIMO CORP Price, Consensus and EPS Surprise

MASIMO CORP Price, Consensus and EPS Surprise | MASIMO CORP Quote

Zacks Rank and Other Key Picks

Currently, Masimo carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical space include Cardiovascular Systems Inc. (CSII - Free Report) , Exelixis, Inc. (EXEL - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, Exelis and Cardiovascular systems sport a Zacks Rank #2 (Buy). However, IDEXX has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cardiovascular Systems represents a stellar one-year return of 52.8%. Notably, the company has an expected long-term growth rate of 22.5%.

Exelis has a stupendous one-year return of almost 94%. In the last reported quarter, the company registered an impressive earnings surprise of 40.74%.

IDEXX Laboratories represents a promising one-year return of 50.23%. The company has a long-term expected growth rate of almost 14.8%.

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