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Masimo (MASI) Q4 Earnings Beat Estimates, View Impressive

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Masimo Corporation (MASI - Free Report) reported fourth-quarter 2019 adjusted earnings per share (EPS) of 91 cents, which surpassed the Zacks Consensus Estimate of 71 cents. Earnings improved 12.3% from the year-ago quarter.

The Zacks Rank #4 (Sell) company’s revenues improved 10.9% year over year to $247.5 million and beat the Zacks Consensus Estimate of $243 million.

2019 Results at a Glance

Masimo’s full-year revenues totaled $937.8 million, up 9.3% year over year.

Adjusted EPS was $3.22, which rose 21.5%.

Product revenues were $936.4 million (99.8%), while Royalty and Other revenues totaled $1.4 million (0.2%).

Segmental Analysis

Product Revenues

Product revenues in the fourth quarter totaled $247.4 million, up 11.8% from the year-ago quarter and 12% at constant currency (cc). Per management, shipments of non-invasive technology boards and monitors increased 1.8% to 61,400 in the quarter.

Royalty and Other Revenues

Revenues at the segment totaled $0.1 million, significantly down from the year-ago quarter’s $1.7 million.

Masimo Corporation Price, Consensus and EPS Surprise

 

Masimo Corporation Price, Consensus and EPS Surprise

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

Margin Analysis

In the quarter under review, gross profit totaled $166.9 million, up 12.5% year over year. Gross margin was 67.4%, up 100 basis points (bps).

Adjusted operating income in the quarter totaled $63.6 million, up 20.9% from a year ago. Adjusted operating margin dropped 190 bps to 25.7% in the quarter.

Research and development expenses totaled $23.4 million, up 12.7%.

SG&A expenses in the quarter grossed $81.9 million, up 11.2%.

Guidance

Masimo expects 2020 product revenues of $1.04 billion, calling for growth of 12.3% and11% at cc. The Zacks Consensus Estimate for the same is pegged at $1.03 billion.

Adjusted EPS is expected at $3.56. The Zacks Consensus Estimate stands at $3.52.

Adjusted gross margin is projected at 68%, while adjusted operating margin is expected at 24.7%.

In Conclusion

Masimo exited the fourth quarter on a strong note. The company continues to gain from its key Product segment, which witnessed solid growth in the quarter. Notably, the company’s non-invasive technology shipments surged in the quarter. In fact, management foresees increased shipments for the quarters ahead. A solid guidance for 2020, recent regulatory approvals and product launches buoy optimism. Expansion in gross and operating margin is heartening as well.

On the flip side, Masimo’s Royalty and Other segment saw significant softness in the quarter. In fact, management expects no contribution from the unit in 2020. The company faces fierce competition from MedTech bigwigs as well.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks, which reported solid results this earnings season, include Stryker Corporation (SYK - Free Report) , Accuray Incorporated (ARAY - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker reported fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Fourth-quarter reported revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2 (Buy).

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.


IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%. The company carries a Zacks Rank of 2.

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