Masimo (MASI) Earnings and Revenues Beat Estimates in Q2

Masimo Corporation MASI reported second-quarter 2020 adjusted earnings per share (EPS) of 85 cents, which surpassed the Zacks Consensus Estimate of 78 cents by 8.9%. Earnings improved 11.8% from the year-ago quarter.

Total revenues (including Royalty) improved 31.1% year over year to $301 million and beat the Zacks Consensus Estimate of $289.33 million by 4%.

Segmental Analysis

Product Revenues

Product revenues in the second quarter totaled $301 million, up 31.1% from the year-ago quarter and 32% at constant currency (cc).

Per management, shipments of non-invasive technology boards and monitors surged 174% to a record 165600 in the quarter.

Margin Analysis

In the quarter under review, gross profit totaled $191.6 million, up 24.1% year over year. Gross margin was 63.6%, down 355 basis points (bps).

Adjusted operating profit in the quarter totaled $62.2 million, up 19.7% from a year ago. Adjusted operating margin contracted 196 bps to 20.7% in the quarter.

Masimo Corporation Price, Consensus and EPS Surprise


Masimo Corporation Price, Consensus and EPS Surprise

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

2020 Guidance

Given the uncertainties surrounding the COVID-19 pandemic and its impact on the company’s normal business patterns, Masimo has not issued any guidance for 2020.

In Conclusion

Masimo exited the second quarter on a strong note. The company continues to gain from its key Product segment, which witnessed solid growth in the quarter under review. The company’s non-invasive technology shipments also surged in the quarter. In fact, management foresees increased shipments for the quarters ahead.The recent launch of the Masimo SafetyNet, designed to help fight the coronavirus pandemic, buoys optimism. The outbreak has boosted demand for the company’s products among direct and OEM customers.

On the flip side, contraction of both margins is a concern. Masimo’s Royalty and Other segment saw no contribution during the quarter. Further, the company faces fierce competition from MedTech bigwigs.

Zacks Rank & Key Picks

Currently, Masimo carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are ViewRay, Inc. VRAY, OPKO Health OPK and ResMed Inc. RMD. Each carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong buy) stocks here.

The Zacks Consensus Estimate for ViewRay’s second-quarter 2020 bottom line is pegged at a loss of 16 cents per share, indicating 50% narrower loss than the year-ago reported quarter figure.

The Zacks Consensus Estimate for OPKO Health’s second-quarter 2020 bottom line stands at a loss of 7 cents per share, suggesting a 30% improvement from the year-ago period. The same for revenues is pegged at $234.6 million, calling for a 3.6% increase from the year-earlier reported figure.

The Zacks Consensus Estimate for ResMed’s fourth-quarter fiscal 2020 revenues is at $710.9 million, calling for a 0.9% increase from the year-earlier reported figure. The same for adjusted earnings per share stands at 99 cents, indicating a 4.2% rise from the year-ago reported figure.

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