Masimo Corporation (NASDAQ:MASI) recently reported second quarter 2014 financial results. Revenues in the quarter (including royalties) grew 2.5% to $140.9 million. Product revenues grew 3% to $133.5 million while revenues from royalties dipped 5.4% to $7.4 million in the quarter. Adjusted net earnings per share came in at 27 cents, down 10% from 30 cents in the second quarter of 2013. The company revised revenue guidance to $588 - $593 million for the year, from earlier $588 - $598 million. It narrowed earnings guidance from earlier $1.24 - $1.33 to $1.24 - $1.30 per share.
The company shipped about 43,400 SET pulse oximetry and rainbow Pulse CO-Oximetry units in the quarter excluding handheld units. Although the figure doesn't appear very impressive as it grew only 2% year-over-year, the fact of the matter is that a substantial part of the company's orders was shifted from Q2 into Q3. Joe Kiani, Chairman and CEO of Masimo, said, "Although our results for the second quarter were below our original Q2 expectations, it will not have a substantial impact on our full year financial guidance given that some rainbow orders, including a large international rainbow order, was shifted from Q2 into Q3."
In my original article I mentioned that the global pulse oximetry market is expected to grow at a CAGR of 5.55% over the period 2011-2015 and Masimo has enormous opportunity in this market. The company expects that its worldwide installed pulse oximetry base might have grown 10% from 1,148,000 units as of June 29, 2013 to 1,260,000 units as of June 28, 2014, which I feel is really impressive. The shares of the company corrected significantly from the 52-week high around $32, and are currently trading around $22. Long-term investors are advised to buy the stock at the current price.
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