Why Masimo Shares Are Dipping Today

Masimo Corp MASI shares are trading lower after the company reported Q2 2023 preliminary results and revised 2023 outlook yesterday.

Q2 2023: The company expects revenues of $453 million- $457 million range (consensus: $553.23 million).

The healthcare revenue is expected to be $280 million-$282 million range, and non-healthcare revenue is projected to range $173 million-$175 million.

The healthcare business was impacted by delayed Q2 large orders into H2, lower single-patient use sensor sales, a decline in customer conversion rate, and a continued rise in hospital labor expenses.

Notably, the company plans to reduce costs in H2 2023. 

Also, MASI projects Q2 non-healthcare revenues to be below expectations on demand decline in the premium and luxury audio and earlier witnessed lower-end consumer audio categories.

The company's unrecognized contract revenue is anticipated to be $1.37 billion-$1.38 billion (+11% to 12% Y/Y) at the end of Q2.

2023 Outlook: MASI expects to reduce the lower end of revenue guidance for the healthcare business to $1.30 billion (from $1.45 billion earlier) and projects to decrease revenue guidance for the non-healthcare business to $800 million-$850 million (from $965 million-$995 million guided earlier).

"While we are disappointed in our revenue results this quarter, our hospital business is strong, as our growth in contracting shows. We do believe sensor utilization and sensor revenue growth rates will return to normal levels. We are also excited about the future for Radius VSM™, Opioid Halo™, Stork™, PerL™, W1™, and our telemonitoring businesses, all of which are in full-scale launch, except for Stork™, which is in limited market release," said Joe Kiani, Chairman and CEO.

The company is expected to report Q2 2023 results on August 8, 2023.

Also Read: Analyst Is Bullish On Masimo Despite Proxy Overhang Concerns - Here's Why

Price Action: MASI shares are down 26.6% at $108.00 pre-market on the last check Tuesday.