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Masimo (MASI) Beats on Q3 Earnings and Revenues, Raises View

Masimo Corp. MASI reported earnings of 70 cents per share in the third quarter of 2017, outperforming the Zacks Consensus Estimate of 53 cents. The bottom line also improved from the year-ago figure of 52 cents.

Revenues improved 15.6% to $193.7 million from $167.6 million in the year-ago quarter and beat the Zacks Consensus Estimate of $189 million.

Quarter Details

Worldwide direct product revenues (87.7% of product revenue) increased by $21.7 million to $159.1 million. OEM sales (12.3% of product revenues) declined 3% to $22.2 million from the year-ago quarter. Total U.S. product revenues increased 4% to $119.3 million on a year-over-year basis.

The company’s Rainbow product revenues in the reported quarter totaled $21.5 million, which were up 19.9% on a year-over-year basis. During the quarter under review, Masimo shipped approximately 51,000 SET Pulse Oximeters and Rainbow SET Pulse CO-Oximeters, excluding handheld units. Per company estimation, its worldwide installed base was 1,566,000 units, as of Sep 30, 2017, up 5.7% from 1,482,000 units as of Oct 1, 2016.

Financial Condition

As of Sep 30, Masimo’s total cash and cash investments were $289.9 million compared with $306 million as of Dec 31, 2016. The company generated $9 million in cash from operations.

 

Masimo Corporation Price, Consensus and EPS Surprise

 

Masimo Corporation Price, Consensus and EPS Surprise | Masimo Corporation Quote

 

Guidance

Masimo now expects fiscal 2017 revenues of approximately $774 million, up from the previous guidance of $769.0 million. Total fiscal 2017 product revenues are projected at approximately $741 million, up from the prior guidance of $736 million. Royalty revenues projection is unchanged at approximately $33.0 million. Fiscal 2017 earnings per diluted share are expected at around $2.95, up from $2.80.

Zacks Rank & Key Picks

Masimo has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. PETS, Luminex Corporation LMNX and Intuitive Surgical, Inc. ISRG. Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed reported earnings per share of 43 cents for the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 bps year over year to 35.2% in the reported quarter.

Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. The company’s revenues in the quarter increased almost 4.1% year over year to $74.1 million.

Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% on a year-over-year basis. Also, revenues increased 18% year over year to $806.1 million.

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