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Insulet (PODD) Q4 Earnings Surpass Estimates, Margins Up
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Insulet Corporation (PODD - Free Report) announced fourth-quarter 2021 adjusted earnings per share (EPS) of 42 cents against the loss of 26 cents in the year-ago period. Earnings surpassed the Zacks Consensus Estimate by 40%.
The quarter’s adjustments exclude the impact from loss on extinguishment of debt of $0.8 million related to the company's repurchase of convertible notes.
For the full year, adjusted EPS was 24 cents, reflecting a stupendous surge of 140% from the year-ago period. It also beat the Zacks Consensus Estimate by 84.6%.
Revenues
Revenues in the fourth quarter totaled $307.7 million, beating the Zacks Consensus Estimate by 2.3%. Moreover, the top line jumped 25% from the year-ago number (up 25.7% at constant exchange rate or CER). Notably, quarterly revenues exceeded the company’s previous growth expectations of 19-25% at CER.
Full-year revenues were $1.09 billion, reflecting a 21.5% increase from the year-ago period (up 19.7% at CER). Revenues were in line with the Zacks Consensus Estimate.
Segment in Detail
Insulet’s total Omnipod revenues of $275.8 million reflect an increase of 19.3% year over year (up 20.1% at CER). International Omnipod revenues of $85.3 million rose 4.2% (up 6% at CER). U.S. Omnipod revenues grew 27.7% year over year to $190.5 million.
Insulet Corporation Price, Consensus and EPS Surprise
The Drug Delivery business revenues totaled $31.9 million, up 112.7% year over year.
Margins
Gross profit in the reported quarter was $213.2 million, up 32.3% from the prior-year quarter. Gross margin of 69.3% expanded 383 basis points (bps).
Meanwhile, selling, general & administrative expenses fell 6.5% to $121.7 million. However, research and development expenses rose 9.1% year over year to $41.8 million.
Operating income totaled $49.7 million against the operating loss of $7.3 million in the prior-year quarter. Accordingly, operating margin in the fourth quarter expanded 1912 bps to 16.2%.
Cash Position
Insulet exited 2021 with cash and cash equivalents of $791.6 million compared with $947.6 million at the end of 2020.
2022 Guidance
Insulet has initiated its financial outlook for first-quarter 2022 and full-year 2022.
For 2022, the company expects revenue growth in the range of 12-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.27 billion.
Insulet’s total Omnipod revenue growth is expected in the range of 15-20% at CER. Meanwhile, the company Drug Delivery revenues are expected in the range of a fall of 35-30% at CER.
For the first quarter of 2022, Insulet projects revenue growth of 13-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $291.7 million.
Total Omnipod revenues are likely to grow 13-16% at CER. However, Drug Delivery revenues are expected in the range of 20-25%.
Our Take
Insulet exited the fourth quarter of 2021 on a bullish note, with better-than-expected earnings and revenues. The company reported year-over-year improvement in the top line on solid uptake of the Omnipod system, both in the U.S. and international markets. This growth amid the pandemic was primarily due to robust revenue growth in the Omnipod product line. The drug delivery revenues increased 113% during the quarter, led by increased production volumes driven by higher-than-expected demand from the partner. Expansion of both margins is another upside. The bullish full year and first-quarter 2022 outlook is indicative of the continuation of the bullish trend.
However, the company expects revenues to decline 30% to 35% for drug delivery in 2022 as levels were elevated during the pandemic. Overall, the stiff competition and economic uncertainty raise apprehension.
Zacks Rank and Key Picks
Insulet currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are McKesson Corporation (MCK - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson, carrying a Zacks Rank #2 (Buy), reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 48% compared with the industry’s 5.8% growth in the past year.
Henry Schein, carrying a Zacks Rank #1, reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.5%.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.
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Insulet (PODD) Q4 Earnings Surpass Estimates, Margins Up
Insulet Corporation (PODD - Free Report) announced fourth-quarter 2021 adjusted earnings per share (EPS) of 42 cents against the loss of 26 cents in the year-ago period. Earnings surpassed the Zacks Consensus Estimate by 40%.
The quarter’s adjustments exclude the impact from loss on extinguishment of debt of $0.8 million related to the company's repurchase of convertible notes.
For the full year, adjusted EPS was 24 cents, reflecting a stupendous surge of 140% from the year-ago period. It also beat the Zacks Consensus Estimate by 84.6%.
Revenues
Revenues in the fourth quarter totaled $307.7 million, beating the Zacks Consensus Estimate by 2.3%. Moreover, the top line jumped 25% from the year-ago number (up 25.7% at constant exchange rate or CER). Notably, quarterly revenues exceeded the company’s previous growth expectations of 19-25% at CER.
Full-year revenues were $1.09 billion, reflecting a 21.5% increase from the year-ago period (up 19.7% at CER). Revenues were in line with the Zacks Consensus Estimate.
Segment in Detail
Insulet’s total Omnipod revenues of $275.8 million reflect an increase of 19.3% year over year (up 20.1% at CER). International Omnipod revenues of $85.3 million rose 4.2% (up 6% at CER). U.S. Omnipod revenues grew 27.7% year over year to $190.5 million.
Insulet Corporation Price, Consensus and EPS Surprise
The Drug Delivery business revenues totaled $31.9 million, up 112.7% year over year.
Margins
Gross profit in the reported quarter was $213.2 million, up 32.3% from the prior-year quarter. Gross margin of 69.3% expanded 383 basis points (bps).
Meanwhile, selling, general & administrative expenses fell 6.5% to $121.7 million. However, research and development expenses rose 9.1% year over year to $41.8 million.
Operating income totaled $49.7 million against the operating loss of $7.3 million in the prior-year quarter. Accordingly, operating margin in the fourth quarter expanded 1912 bps to 16.2%.
Cash Position
Insulet exited 2021 with cash and cash equivalents of $791.6 million compared with $947.6 million at the end of 2020.
2022 Guidance
Insulet has initiated its financial outlook for first-quarter 2022 and full-year 2022.
For 2022, the company expects revenue growth in the range of 12-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.27 billion.
Insulet’s total Omnipod revenue growth is expected in the range of 15-20% at CER. Meanwhile, the company Drug Delivery revenues are expected in the range of a fall of 35-30% at CER.
For the first quarter of 2022, Insulet projects revenue growth of 13-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $291.7 million.
Total Omnipod revenues are likely to grow 13-16% at CER. However, Drug Delivery revenues are expected in the range of 20-25%.
Our Take
Insulet exited the fourth quarter of 2021 on a bullish note, with better-than-expected earnings and revenues. The company reported year-over-year improvement in the top line on solid uptake of the Omnipod system, both in the U.S. and international markets. This growth amid the pandemic was primarily due to robust revenue growth in the Omnipod product line. The drug delivery revenues increased 113% during the quarter, led by increased production volumes driven by higher-than-expected demand from the partner. Expansion of both margins is another upside. The bullish full year and first-quarter 2022 outlook is indicative of the continuation of the bullish trend.
However, the company expects revenues to decline 30% to 35% for drug delivery in 2022 as levels were elevated during the pandemic. Overall, the stiff competition and economic uncertainty raise apprehension.
Zacks Rank and Key Picks
Insulet currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are McKesson Corporation (MCK - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Bio-Rad Laboratories, Inc. (BIO - Free Report) .
McKesson, carrying a Zacks Rank #2 (Buy), reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 48% compared with the industry’s 5.8% growth in the past year.
Henry Schein, carrying a Zacks Rank #1, reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.5%.
Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2.
Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.