Irvine-based Masimo Corp., a manufacturer of noninvasive monitoring devices, ran counter to much of its industry cohort, not to mention the wider market when its shares rose about 8% in March.
It traded last week just 4% below its price in mid-February when a general rout driven by the coronavirus pandemic decimated share prices of dozens of OC public companies.
On April 1, Masimo (Nasdaq: MASI) showed why investors are bullish.
Masimo said preliminary revenue should be between $265 million and $271 million for the first quarter ended March 28, a 14.9% to $17.5% rise over the same period a year ago.
That result tops the $252.5 million average expected by six analysts surveyed by Yahoo Finance.
Demand is booming for its products, particularly patient monitoring systems for the lungs and heart.
“We are seeing a lot of growth,” Chief Financial Officer Micah Young told the Business Journal late last week, adding that sales have generally increased in the 12% range in recent quarters.
Masimo’s systems upload data to a mobile app where physicians can remotely check on their patients, including those with COVID-19.
“These patients need to be monitored constantly and closely,” Young said.
The first quarter results mirror what Chief Executive Joe Kiani told the Business Journal during an interview in late February; he noted that the company was getting calls from countries around the world for its products.
Masimo was one of just six companies out of 66 based here that saw shares rise last month. The S&P 500 dropped 12.5% in March due to the coronavirus causing the shutdown of the economy.
Masimo now sports a $9.5 billion market cap, which would have ranked it No. 5 on last year’s list of publicly traded companies here.
Because of the coronavirus’ impact on the stock market since mid-February, and the week-to-week volatility in the market over that time, the Business Journal has postponed its annual list, initially scheduled to run this week, until a more accurate snapshot can be made.
This week’s Special Report (see page 21) details how the coronavirus has moved share prices—and compassion—at some of Orange County’s best-known publicly traded companies.
Uncertain Future
In its April 1 update, Masimo withdrew 2020 guidance and said it could be either positively or negatively affected by coronavirus.
“The potential positive impacts include increased demand for our products from both direct and OEM customers, which has continued into the first days of the second quarter,” the company said.
“The potential negative impacts include potential interruptions in our manufacturing operations and our suppliers’ manufacturing operations, and potential reductions in future demand if there has been overbuying of our products due to the pandemic.”
Masimo, which is considered an essential business, has sent its non-essential workers home so only a reduced workforce is present, including upper-level executives, Young said.
March Moves
Masimo was busy on several fronts involving the coronavirus.
It went acquisitive on March 19, disclosing its intention to buy TNI Medical AG in Würzburg, Germany for an undisclosed price. TNI’s softFlow technology provides high-flow, warmed and humidified respiratory gases to patients suffering from serious pulmonary conditions—coronavirus patients suffer from just these maladies.
The deal follows an August investment in TNI that included an exclusive option to buy the company.
“We had been in talks with the company for a while now and when this whole [COVID-19] thing happened, we decided to just go ahead and pull the trigger,” Young said.
A second initiative responded to worldwide blood shortages.
Masimo on March 23 said it licensed its Rainbow platform for no additional charge to hospitals where its devices are already in use. Rainbow allows continuous monitoring of 12 parameters including hemoglobin, for some conditions the company said.
Masimo will discuss the coronavirus when it issues first quarter results after the close of markets on April 28.
