Masimo’s Q2 kills it

Masimo (NSDQ:MASI) yesterday shattered expectations with its 2nd-quarter sales and earnings, posting a more than 40% profit gain on solid sales growth.

The Irvine, Calif.-based patient monitoring company reported profits of $19.4 million, or 36¢ per share, on sales of $147.6 million for the 3 months ended July 4, for a bottom-line gain of 40.2% on sales growth of 10.6% compared with Q2 2014.

Adjusted to exclude 1-time items, earnings per share were 43¢, 6¢ ahead of Wall Street’s consensus forecast. The news sent MASI shares up 5.2% to $43.97 apiece today in mid-day trading.

The results also prompted Masimo to raise its earnings and sales guidance for the rest of the year. The company said it now expects to post EPS of $1.43, up from $1.33, on sales of roughly $621 million (up from prior guidance for $608 million). Adjusted EPS are pegged at $1.61, the company said.

“Our 2nd-quarter results reflect the continued demand for our Set pulse oximetry technology and our emerging Rainbow SET pulse CO-oximetry technology. The years of building a solid foundation of technologies and products that save and improve lives, along with a build out of our infrastructure to best serve our customers, should allow us to continue to deliver positive returns for our shareholders,” chairman & CEO Joe Kiani said in prepared remarks.

Masimo was cagey about a new contract it signed during the quarter, declining to include it in its guidance for the balance of 2015. All Kiani would say when pressed by analysts during a conference call is that Masimo won “a large tender in the Middle East” with “significant upside.”

“However, because this is a new business for us, we decided not to put it in our guidance because it’s a new business opportunity that we haven’t had before, and we just wanted to see us getting the actual orders that come from winning this tender, delivering the product through our distributor and agents to the final customer, before we further elaborated on it,” he said, according to a Seeking Alpha transcript. “But we are very happy with this wonderful new tender we won. It’s across our entire product line. And assuming it all comes in, it will provide significant upside to our business over the next 3 quarters at least.”

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