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Insulet (PODD) Q3 Earnings & Revenues Top Estimates, View Up

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Insulet Corporation (PODD - Free Report) announced third-quarter 2020 earnings per share (EPS) of 17 cents compared with the Zacks Consensus Estimate of 6 cents and the year-ago earnings of a penny per share.

Revenues in the third quarter totaled $234 million, beating the Zacks Consensus Estimate by 5.8%. Moreover, the top line jumped 21.8% from the year-ago number (up 28.8% at constant exchange rate or CER).

Segment in Detail

Insulet delivered third-quarter total Omnipod revenues of $202 million, reflecting an increase of 25.6% year over year (up 19.9% at CER).

International Omnipod revenues of $79.8 million were up 12.4% at CER, exceeding the company’s expectation of 9-11% growth at CER. The revenue uptick included benefits from better-than-expected new customer starts. There was an estimated 4 million to 5 million growth in channel inventory, primarily driven by stocking shipments of Omnipod DASH.

U.S. Omnipod revenues grew 20.9% year over year to $132.3 million.

Insulet Corporation Price, Consensus and EPS Surprise

Insulet Corporation Price, Consensus and EPS Surprise

Insulet Corporation price-consensus-eps-surprise-chart | Insulet Corporation Quote

The Drug Delivery business revenues totaled $21.9 million, up 47% year over year exceeding the company’s expectation of 23-28% growth for the third quarter. This was primarily the result of Insulet partners' increased forecast related to the current environment.

Margins

Gross profit in the reported quarter was $151.8 million, up 23.3% from the prior-year quarter. Gross margin of 64.9% expanded 79 basis points (bps). According to the company, this primarily included improving performance of the company’s U.S. manufacturing, favorable revenue mix from the shift to higher volume through the pharmacy channel and favorable product line mix.

Meanwhile, selling, general & administrative expenses rose 19.3% to $89.2 million. Research and development expenses went up 23.9% year over year to $38.8 million. Operating profit totaled $23.8 million, reflecting 40% rise from the prior-year quarter. Further, operating margin in the third quarter expanded 132 bps to 10.2%.

2020 Guidance

Insulet provided an update to its earlier-stated guidance for 2020.

Overall, for the year, total revenues are expected to grow in the band of 20%-21% at CER (an increase from 17%-19% expected earlier). The Zacks Consensus Estimate for total revenues is pegged at $873.8 million.

Total Omnipod revenues are likely to grow 21%-22% at CER (the previously-provided guidance was 18%-20%). U.S. Omnipod revenue growth is expected in the range of 23%-24% (19%-20%). Further, International Omnipod revenue growth is likely to be 18%-19% at CER (an increase from the earlier-provided 17%-19% growth projection). Drug Delivery revenues are expected to rise in the band of 4% to 6% (earlier it was expected to decline around the mid-point of 3% to 6%).

For the fourth quarter of 2020, Insulet projects revenue growth of 7-11% at CER. The Zacks Consensus Estimate for revenues is pegged at $228.3 million.

Total Omnipod revenues are expected to grow 10-14%. Revenues in the Drug Delivery segment are expected to grow 17-23%.

Our Take

Insulet exited the third quarter on a strong note, thanks to the year-over-year improvement in revenues on the solid uptake of the Omnipod system, both in the United States and the international markets. This stupendous growth amid the crisis was primarily due to record revenue growth in total Omnipod product line along with growth in other segments. The momentum of Omnipod DASH is encouraging based on the solid uptake in geographies in which it has been launched. The company’s plans of geographical expansion buoy optimism. Margin expansion and increase in full-year guidance is encouraging as well.

Zacks Rank and Stocks to Consider

Insulet currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific (TMO - Free Report) , Align Technology (ALGN - Free Report) and AngioDynamics (ANGO - Free Report) .

While Align Technology sports a Zacks Rank of 1 (Strong Buy), both Thermo Fisher and AngoDynamics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

AngioDynamics reported first-quarter fiscal 2021 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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