), a leader in non-invasive monitoring technology for patient
care, recorded fourth quarter and 2012 earnings per share of 26
cents and $1.04, respectively, missing the corresponding Zacks
Consensus Estimates of 28 cents and $1.09 but beating the
year-ago earnings per share of 23 cents and $1.05, respectively.
Reported profit rose 8.6% year over year to $15 million in the
Revenues in the quarter increased 18% year over year to $132.2
million, beating the Zacks Consensus Estimate of $128 million.
For 2012, revenues moved up 12% to $493.2 million, surpassing the
Zacks Consensus Estimate of $490 million.
Product revenues were up 20% to $125.3 million in the reported
quarter. Masimo's global end-user business (85% of product
revenue) improved 18% year over year, while revenues from
Original Equipment Manufacturer (OEM) (15% of product revenue)
were up 28%. Sales of Rainbow products increased 13% year over
year to $11.1 million.
During the quarter, Masimo shipped about 42,700 Masimo SET
pulse oximetry and Masimo Rainbow SET pulse co-oximetry units,
excluding hand-held sets, up 24% year-over-year. The company's
worldwide installed base increased 11% year over year to about
1,088,000 units at the end of the fourth quarter.
Gross margin stood at 66% in the quarter, higher than 65.5% a
year ago. Operating margin declined to 16.9% from 17.9% a year
Masimo ended the quarter with cash and cash equivalents of
$71.6 million, down 44.9% year over year.
Masimo issued its guidance for 2013. The company forecasts
total sales of about $548 million comprising of product sales of
$520 million and $28 million of royalty. Masimo expects reported
earnings per share of $1.14 for 2013.
Masimo is a market leader in the pulse oximetry monitoring
equipment industry. The company's prospects are encouraging,
given the sizeable global market opportunity, adoption of pulse
oximetry in non-critical areas of the hospital and growing
barriers to entry due to additional non-invasive parameters.
While Masimo's patented SET offering remains its mainstay, the
rainbow measurements represent another growth driver. However,
the company's reliance on third-party providers like OEMs for a
part of its business and customer concentration raises concern.
Additionally, we remain concerned about Masimo's reliance on
group purchasing organizations for the sale of its pulse oximetry
products to hospitals in the domestic market.
We also note
) effort to expand its oximetry and monitoring products
portfolio. In late 2012, the company won U.S. Food and Drug
Administration (FDA) 510(k) approval as well as European Economic
Area (EEA) CE Mark clearance for its Nellcor Bedside Respiratory
Patient Monitoring system.
The stock carries a Zacks Rank #4 (Sell). We are more positive
Given Imaging Ltd.
Novadaq Technologies Inc.
) both of which are Zacks Rank #1 (Strong Buy) and are expected
to do well.
COVIDIEN PLC (COV): Free Stock Analysis
GIVEN IMAGING (GIVN): Free Stock Analysis
MASIMO CORP (MASI): Free Stock Analysis
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