Masimo Corporation Q1 Earnings Rise, Beat Ests - Analyst Blog

Masimo Corporation MASI posted a 39.3% rise in adjusted net earnings to 39 cents per share for the first quarter of 2014 from 28 cents for the same quarter of 2013 and beat the Zacks Consensus Estimate by 10 cents. Adjusted net earnings rose 37.8% to $22.6 million from $16.4 million in the first quarter of 2013.

Revenues in the quarter (including royalties) scaled up 2.8% to $139.8 million, missing the Zacks Consensus Estimate of $144.0 million.

Product revenues grew 2.8% to $132.2 million while global direct product revenues rose 3% in the first quarter, representing 84% of total product revenues. OEM sales, which accounted for 16% of product revenues, upped 2% in the quarter.

Revenues from sales of MASI rainbow products spiked 23% to $12.9 million in the first quarter. Revenues from Royalty went up 3.8% to $7.6 million in the quarter.

MASI shipped about 41,400 SET pulse oximetry and rainbow Pulse CO-Oximetry units in the quarter (excluding handheld units), up 5% year-over-year. MASI expects worldwide installed base of 1,231,000 units as of Mar 29, 2014, up 10% from 1,117,000 units as of Mar 30, 2013.

MASI had cash and cash equivalents of $117.5 million as of Mar 29, 2014, up 23.1% from $95.5 million as of Dec 28, 2013. Capital lease obligations amounted to $258 thousand as of Dec 28, 2013, down 23.2% compared with $336 thousand as of Dec 28, 2013.

In the quarter, cash flow from operating activities dipped 4.3% to $24.0 million from $25.1 million in the 2013-first quarter. Capital expenditure surged 54.4% to $2.8 million compared with $1.8 million a year ago.

For 2014, MASI expects revenues of $588 to $598 million, which includes Product revenues of $560 to $570 million and Royalty revenues of $28 million. Product revenue guidance includes rainbow revenues of $60 million. The current Zacks Consensus Estimate for 2014 revenues of $587 million lies within the guided range.

MASI also expects reported earnings in the range of $1.24 to $1.33 for 2014. The current Zacks Consensus Estimate of $1.23 lies below the outlook range.

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 #2 (Buy).

Other players that worth a look in the medical instruments industry include Delcath Systems, Inc. DCTH, Accuray Inc. (ARAY) and Edwards Lifesciences Corp. EW. While Delcath Systems sports a Zacks Rank #1 (Strong Buy), both Accuray and Edwards Lifesciences retain Zacks Rank #2 (Buy).