- Masimo has reported preliminary fourth-quarter results and forecast 2024 sales that top analyst expectations.
- The healthcare business drove the difference between the expectations and the results. Masimo expects fourth-quarter healthcare sales of between $336 million and $341 million, compared to the consensus estimate of $325.8 million quoted by BTIG analysts.
- BTIG analysts and their peers at Stifel sent upbeat notes to investors about the results, framing the fourth-quarter beat and outlook for 2024 as signs that Masimo may be recovering after failing to meet their expectations earlier in the year.
Masimo cut its full-year revenue and profit forecasts twice last year. The manufacturer of pulse oximetry devices blamed delays to large orders from hospitals for its performance in the second quarter. Hospital budget pressures slowed equipment installations in the third quarter, according to Masimo. The failures to meet expectations followed a campaign that saw an activist investor secure two seats on the company’s board.
The fourth quarter looks set to reverse the trend. Masimo estimates fourth-quarter sales will be in the range of $541 million to $551 million, above the $537.1 million consensus of analysts. The company is on course to exceed analyst expectations despite its estimated range of non-healthcare sales falling short of the consensus, according to BTIG.
Masimo’s forecast for 2024 implies the uptick at the healthcare unit in the fourth quarter will continue into this year. The company is predicting full-year healthcare revenue of $1.35 billion to $1.39 billion, compared to the analyst consensus of $1.33 billion.
Stifel analysts were encouraged by the update.
“Encouragingly, after two disappointing below-consensus sales quarters, Masimo’s preannouncement segment revenue ranges imply that the Healthcare business [about 62% of sales] led the top-line beat vs. our estimates,” the Stifel analysts wrote.
“Reversing the recent disappointing quarterly trend, we view this preannouncement favorably and as an early sign that Masimo could be heading in a more positive fundamental direction,” they added.
Masimo plans to release its full fourth-quarter results on Feb. 27. Masimo is in a patent dispute with Apple that could stop the sale of some of the tech company’s smartwatches.