Investors had good reason to hope for a positive start to 2019 for Masimo Corporation (NASDAQ:MASI). The company reported solid fiscal 2018 fourth-quarter results in February and boosted its outlook for full-year 2019.

Masimo announced its 2019 first-quarter results after the market closed on Monday. Did the company get off to as good of a start this year as anticipated? Here's what you need to know from Masimo's first-quarter update.

Patient in hospital bed with a Masimo pulse oximeter next to them.

Image source: Masimo.

Masimo results: The raw numbers

Metric

Q1 2019

Q1 2018

Year-Over-Year Change

Sales

$231.7 million $212.9 million

8.8%

Net income from continuing operations

$49.3 million $45.6 million

8.1%

Adjusted earnings per share (EPS)

$0.79 $0.64

23.4%

Data Source: Masimo.

What happened with Masimo this quarter?

It's easy to spot why Masimo's revenue came in even better than most observers expected for the first quarter. Shipments of the company's noninvasive technology boards and monitors jumped 18.8% year over year to 63,700. As a result, the company's product revenue increased by 12.8% over the prior-year period to $230.5 million. Adjusted for foreign exchange fluctuation, Masimo's product revenue increased by 14.3% year over year.

The company's GAAP net income trailed its revenue growth slightly. This stemmed primarily from a higher growth rate in the cost of goods sold. Masimo managed to hold the line pretty well on operating costs, which increased only 6.5% over the prior-year period.

Masimo's adjusted non-GAAP EPS, however, jumped much higher year over year than its GAAP numbers. This increase was largely due to a significant negative adjustment in the prior-year period related to royalty and other revenue. The company also had a smaller positive impact from taxes in the first quarter of 2019 than it did in the year-ago period.

What management had to say

Masimo CEO Joe Kiani stated:

We're off to a great start to 2019, and we are happy to report first-quarter results that once again exceeded expectations. Our first-quarter results illustrate the strength of our global business. Our product revenue increased 14.3% on a constant currency basis to reach $230.5 million, while we had record worldwide shipments of 63,700 noninvasive technology boards and monitors. While we are enabling more customers to improve their patient care and simultaneously helping them reduce their cost of care, our clinical leading noninvasive monitoring technologies are the driving force behind our financial success. 

Looking forward

Perhaps the best news from Masimo's first-quarter update is that the company now has higher expectations for full-year 2019. Masimo increased its top- and bottom-line guidance for the full year.

The company now projects total revenue of $919.1 million, up from its previous outlook of $912 million. Masimo anticipates GAAP diluted EPS of $3.25. It previously projected GAAP EPS of $3.19. It also expects adjusted non-GAAP EPS in full-year 2019 of $3.12, higher than the guidance provided in February of adjusted EPS of $3.08.