Masimo Corporation MASI delivered adjusted earnings per share (EPS) of $1.80 in the fourth quarter of 2024, up 44% year over year. The figure beat the Zacks Consensus Estimate by 20.8%.

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The adjustments include acquired intangible asset amortization, and acquisitions, integrations, divestitures, and related costs, among others.

GAAP loss per share for the quarter was $6.52 (which included an impairment of goodwill and intangibles for Sound United) against the year-ago period’s EPS of 63 cents.

Full-year 2024 adjusted EPS was $4.40, up 16.1% from the comparable 2023 period. The metric topped the Zacks Consensus Estimate by 7.3%.

MASI’s Revenues in Detail

Masimo registered revenues of $600.7 million in the fourth quarter, up 9.4% year over year on a reported basis. The figure beat the Zacks Consensus Estimate by 0.8%.

The top line was aided by robust Healthcare and Non-healthcare revenues.

Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, totaled 65,000 in the fourth quarter of 2024.

Full-year 2024 revenues were $2.09 billion, reflecting a 2.3% increase from the comparable 2023 figure. The metric was in line with the Zacks Consensus Estimate.

Shares of this company gained nearly 6.2% in yesterday’s after-hours trading.

Masimo’s Segmental Details

Masimo derives its revenues from two business sources — Healthcare and Non-healthcare.

Healthcare revenues in the fourth quarter totaled $368.5 million, indicating an uptick of 8.4% on a reported basis. At constant exchange rate (CER), revenues were $369.4 million, up 8.7% year over year. This compares to our projection of revenues of $372.5 million and $371.5 million, respectively, in the fourth quarter.

Within Masimo’s Healthcare segment, the consumable and service revenues saw strong growth, which was partially offset by a decline in capital equipment and other revenues. Within the consumable and service revenues, MASI delivered strong performance across its major product platforms, with pulse oximetry, CO-Oximetry and hemodynamics, capnography and gas and brain monitoring exceeding their respective growth targets.

Non-healthcare revenues in the fourth quarter amounted to $232.2 million, implying an uptick of 11.1% year over year on a reported basis. At CER, revenues were $231.5 million, up 10.7% year over year. This compares to our projections of revenues of $223.4 million and $221.4 million, respectively, in the fourth quarter.

MASI’s Margin Analysis

In the quarter under review, Masimo’s gross profit decreased 6.9% year over year to $244.7 million. The gross margin contracted 712 basis points (bps) to 40.7%.

Selling, general & administrative expenses increased 38.6% year over year to $221.5 million. Research and development expenses rose 104.5% year over year to $77.7 million. Total adjusted operating expenses of $299.2 million increased 51.3% on a year-over-year basis.

Total adjusted operating loss was $54.5 million in the reported quarter against the prior-year quarter’s adjusted operating profit of $64.9 million.

Masimo’s Financial Position

Masimo exited 2024 with cash and cash equivalents of $177.6 million compared with $163 million at the end of 2023. Long-term debt at the end of 2024 was $727.9 million compared with $871.7 million at 2023-end.

Cumulative net cash provided by operating activities at the end of 2024 was $196.4 million compared with $94.1 million a year ago.

MASI’s Guidance

Masimo has revised its outlook for 2025.

For 2025, Healthcare revenues are continued to be expected in the range of $1,500 million to $1,530 million, up 8-10% on a reported basis and 8-11% at CER from the comparable 2024 period.

Management also expects to ship 240,000 to 260,000 technology boards and instruments in 2025.

Adjusted EPS for 2025 is now projected to be in the range of $5.10-$5.40 (reflecting growth of 22-29% from the comparable 2024 figures), up from the earlier projection of $4.90 to $5.10. The Zacks Consensus Estimate is pegged at $4.50.

Our Take

Masimo exited the fourth quarter of 2024 with better-than-expected results. The uptick in consolidated revenues and both Healthcare and Non-healthcare revenues was encouraging. The continued strength in the consumable and service revenues looked promising.

During the quarter, MASI continued to realize the benefits of manufacturing its high-volume sensors in Malaysia. This raises our optimism.

On the flip side, the continued decline in its capital equipment and other revenues was disappointing. Rising operating costs leading to the contraction of the gross margin in the quarter do not bode well.

Masimo’s Zacks Rank & Other Key Picks

MASI currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.

Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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