Masimo (Nasdaq:MASI) shares ticked up before hours today on third-quarter results that came in ahead of the consensus forecast.
Shares of MASI rose more than 11% to $168.52 apiece by late afternoon trading today.
The Irvine, California-based patient monitoring tech company reported profits of $9.8 million. That equals 18¢ per share on sales of $504.6 million for the three months ended Sept. 28, 2024.
Masimo recorded a 7.5% bottom-line slide on a sales increase of 5.4%. Healthcare sales of $343.3 million marked an increase of 11.5%.
Adjusted to exclude one-time items, earnings per share came in at 98¢. That landed 14¢ ahead of expectations on Wall Street. Sales also topped estimates as experts forecast $502.6 million in revenue.
These results mark the first quarterly earnings for Masimo following massive upheaval at the top of the company. Founder and CEO Joe Kiani resigned after a September shareholder vote that ousted him from the position of board chair following a lengthy proxy battle between Masimo and Politan Capital Management.
“We are pleased to report strong third quarter performance, driven by our core healthcare segment,” said interim CEO Michelle Brennan. “We appreciate the commitment and energy of our employees, which has resulted in a seamless transition since our Annual Meeting with no disruption to our business or departures of critical talent. Our focus is on positioning Masimo to achieve its significant long-term growth potential by capitalizing on the many opportunities we see ahead of us, including through our ongoing review of the product portfolio and R&D projects.
Brennan also said the company continues to progress on its strategic review of its consumer business.
Masimo updated its full-year guidance with a slight cut to expected revenues, but the company anticipates higher adjusted EPS than previously suggested. After previously projecting sales between $2.085 billion and $2.135 billion, Masimo now expects between $2.075 billion and $2.105 billion. The company increased its EPS guidance from between $3.80 and $4 to between $3.95 and $4.10.
The analysts’ take on the Masimo earnings report
BTIG analysts Marie Thibault and Sam Eiber note that Masimo’s third-quarter beat was driven by strong growth for its consumables and service revenues within healthcare. Declines in capital equipment partially offset that growth, however.
They also highlighted Brennan’s point about no disruptions to business or departures of critical talent in the wake of the changes at Masimo. The company plans to allocate resources to fewer but high return on investment initiatives while rightsizing corporate overhead costs.
As a result, the analysts anticipate expanded operating margins that come in higher than their previous, cautious outlook. They maintain their “Buy” rating for Masimo.
“We are pleased to see how quickly the new management and board are moving to enhance the P&L and, with a backdrop of healthy consumables revenue growth and hospital contracting, believe Masimo is set up to outperform in Q4 and into 2025,” the analysts wrote.
