), a leader in non-invasive monitoring technology for patient
care, reported third quarter 2012 adjusted earnings per share of
24 cents, missing the Zacks Consensus Estimate by a penny.
However, the result was in line with the year-ago earnings.
Reported profit declined almost 7% year over year to $13.8
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MASIMO CORP (MASI): Free Stock Analysis
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Revenues in the quarter increased 14% year over year to $119.1
million, trailing the Zacks Consensus Estimate of $121 million.
Year-over-year growth was led by record sales of the company's
well regarded rainbow products.
Product revenues were up 15% (up 12% after accounting for recent
acquisitions) to $112.1 million in the reported quarter. Masimo's
global end-user business (85% of product revenue) improved 15%
year over year, revenues from Original Equipment Manufacturer
(OEM) (15% of product revenue) were up 13%. Sales of rainbow
products soared 41% year over year to $11 million and included a
92% hike in total hemoglobin (SpHb) revenues.
During the quarter, Masimo shipped about 33,100 Masimo SET pulse
oximetry and Masimo rainbow SET pulse co-oximetry units excluding
hand-held sets, flat year-over-year. The company's worldwide
installed base increased 11% year over year to about 1,056,000
units at the end of the third quarter.
Gross margin stood at 68.8% in the quarter, flat on a
year-over-year basis. Operating margin declined to 15.1% from
18.2% a year ago.
Masimo ended the quarter with cash and cash equivalents of $113
million, down 21.1% year over year. The cash used for recent
acquisitions and share repurchases accounted for the decline in
cash and cash equivalents.
Masimo reiterated its guidance for 2012 during the third quarter
conference call. The company forecasts total sales of $494
million comprised of product sales of $466 million and $28
million of royalty. Masimo forecasts reported earnings per share
of $1.11 for 2012.
In a concerted effort to boost shareholder value, the Board of
Directors of Masimo announced a special dividend of $1.00 per
share. The dividend will be paid on December 11 to shareholders
of record as of November 27.
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 beyond
hospital care. 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
We also note
) efforts to expand its oximetry and monitoring products
portfolio. Last month, 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.
We currently have a long-term 'Neutral' recommendation on Masimo.
The stock carries a Zacks #3 Rank, which translates into a
short-term Hold rating.