Masimo Corp. Beats but Sees Flat Earnings

Zacks

Masimo Corporation (MASI) posted flat earnings of 30 cents per share in the second quarter of the year compared with the prior-year quarter but beat the Zacks Consensus Estimate by 3 cents. Net earnings fell marginally by 4.0% to $17.0 million from $17.7 million a year ago.

Masimo's revenues (including royalties) during the quarter went up almost 12.0% to $137.4 million, slightly exceeding the Zacks Consensus Estimate of $136 million.

Product revenues grew 12% to $129.6 million from $115.3 million in the second quarter of 2012. Worldwide direct product revenues rose 10% in the quarter and represented 83% of total product revenue.

OEM sales, which accounted for 17% of product revenue, escalated 27% from the same period in 2012. Revenue from Masimo rainbow products went up 19% to $11.5 million in the second quarter, which included $3.6 million in sales of total hemoglobin products.

Masimo shipped approximately 42,600 SET pulse oximetry and rainbow SET Pulse CO-Oximetry units, excluding handheld units, in the quarter. This was up 14% from 37,300 units in the second quarter of 2012. The company’s worldwide installed base is estimated to be 1,148,000 units as of Jun 29, 2013, up 11% from 1,033,000 units as of Jun 30, 2012.

MASI had cash and cash equivalents of $78.1 million as of Jun 29, 2013, up from $71.6 million as of Dec 29, 2012. Capital lease obligations rose to $340 thousand as of Jun 29, 2013 compared with $115 thousand as of Dec 29, 2012.

In the first six months of 2013, cash flow from operating activities rose marginally by nearly 4.0% to $32.4 million from $31.2 million in the same period of 2012. Capital expenditure decreased to $3.9 million compared with $4.8 million a year ago.

MASI develops innovative monitoring technologies that significantly improve patient care -- helping solve unsolvable problems. The company sells its products to hospitals, emergency medical response organizations, and alternate care market through its direct sales force and distributors, as well as to original equipment manufacturer partners. Currently, it retains a Zacks Rank #3 (Hold).

Other stocks that are also performing well in the medical instruments industry include Mindray Medical International Limited (MR), Echo Therapeutics, Inc. (ECTE) and IDEXX Laboratories, Inc. (IDXX). All of them are Zacks Rank #2 (Buy) stocks.
 

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