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Insulet (PODD) Q4 Earnings Beat Estimates, Margins Down
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Insulet Corporation (PODD - Free Report) reported adjusted earnings of 55 cents per share in fourth-quarter 2022, up 31% from the year-ago period’s earnings of 42 cents.
Fourth-quarter 2022 earnings exceeded the Zacks Consensus Estimate for adjusted earnings by 129.2%.
The quarter’s adjustment excludes a charge of $57.9 million associated with a voluntary medical device correction notice issued to replace the Omnipod DASH Personal Diabetes Managers.
GAAP EPS was 24 cents compared with earnings of 42 cents per share in the year-ago period.
For the full year, adjusted EPS were $1.28, up 48.8% from the year-ago period’s levels. The figure also topped the Zacks Consensus Estimate of 9 cents.
Revenues
Revenues in the fourth quarter totaled $369.7 million, beating the Zacks Consensus Estimate by 11.8%. Moreover, the top line jumped 20.1% from the year-ago quarter’s number (up 22.6% at the constant exchange rate or CER). Quarterly revenues exceeded the company’s previous growth expectations of 11-14% at CER.
Total revenues for 2022 were $1.31 billion, up 18.8% from the year-ago period’s levels (up 22.2% at the constant exchange rate or CER). The figure beat the Zacks Consensus Estimate by 2.3%.
Segment in Detail
Insulet’s Total Omnipod revenues of $366.4 million reflected an increase of 32.8% year over year (up 35.6% at CER). International Omnipod revenues of $90.2 million rose 5.7% (up 18.6% at CER). U.S. Omnipod revenues grew 45% year over year to $276.2 million.
The Drug Delivery business revenues totaled $3.3 million, down 89.7% year over year.
Margins
Gross profit in the reported quarter was $217.3 million, up 1.9% from the prior-year quarter. Gross margin of 58.8% contracted a significant 1051 basis points.
Selling, general & administrative expenses rose 18.6% to $144.3 million. Research and development expenses rose 18.4% year over year to $49.5 million.
Insulet Corporation Price, Consensus and EPS Surprise
The operating margin contracted 980 basis points to 6.4%.
Cash Position
Insulet exited 2022 with cash and cash equivalents of $674.7 million, compared with $791.6 million at the end of 2021.
2023 Guidance
Insulet has provided its guidance for 2023.
For 2023, the company expects its revenue growth in the range of 14-19% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.46 billion.
Insulet’s Total Omnipod revenue growth is now expected in the range of 17-22% at CER. The company currently expects Drug Delivery revenues to fall in the range of 55-45 % at CER.
For the first quarter of 2023, Insulet projects revenue growth of 11-14% at CER. The Zacks Consensus Estimate for total revenues is pegged at $326.8 million.
Total Omnipod revenues are likely to grow 22-25% at CER. However, Drug Delivery revenues are expected to fall in the range of 100-95% at CER.
Our Take
Insulet exited the fourth quarter of 2022 with better-than-expected earnings and revenues. The company’s performance benefited from record quarterly U.S. and Total Omnipod new customer starts. This was driven mainly by a strong start to the company’s U.S. full market release of the Omnipod 5 automated insulin delivery system. The company recently achieved milestones of 360,000 estimated active global customers using the Omnipod System, including over 100,000 customers in the United States using Omnipod 5.
However, the substantial fall in Drug Delivery sales is discouraging. Contraction in margins does not bode well. On a year-over-year basis, the company expects gross margin to be impacted by higher costs associated with the U.S. manufacturing ramp, product line mix due to the ramp-up of Omnipod 5 and lower drug delivery revenues. Supply chain disruptions and inflationary pressures continue to challenge business operations.
Zacks Rank and Key Picks
Insulet currently carries Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
BD, carrying a Zacks Rank #2 (Buy), reported first-quarter fiscal 2023 adjusted EPS of $2.98, beating the Zacks Consensus Estimate by 11.6%. Revenues of $4.59 billion outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 7.8%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average being 6.5%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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Insulet (PODD) Q4 Earnings Beat Estimates, Margins Down
Insulet Corporation (PODD - Free Report) reported adjusted earnings of 55 cents per share in fourth-quarter 2022, up 31% from the year-ago period’s earnings of 42 cents.
Fourth-quarter 2022 earnings exceeded the Zacks Consensus Estimate for adjusted earnings by 129.2%.
The quarter’s adjustment excludes a charge of $57.9 million associated with a voluntary medical device correction notice issued to replace the Omnipod DASH Personal Diabetes Managers.
GAAP EPS was 24 cents compared with earnings of 42 cents per share in the year-ago period.
For the full year, adjusted EPS were $1.28, up 48.8% from the year-ago period’s levels. The figure also topped the Zacks Consensus Estimate of 9 cents.
Revenues
Revenues in the fourth quarter totaled $369.7 million, beating the Zacks Consensus Estimate by 11.8%. Moreover, the top line jumped 20.1% from the year-ago quarter’s number (up 22.6% at the constant exchange rate or CER). Quarterly revenues exceeded the company’s previous growth expectations of 11-14% at CER.
Total revenues for 2022 were $1.31 billion, up 18.8% from the year-ago period’s levels (up 22.2% at the constant exchange rate or CER). The figure beat the Zacks Consensus Estimate by 2.3%.
Segment in Detail
Insulet’s Total Omnipod revenues of $366.4 million reflected an increase of 32.8% year over year (up 35.6% at CER). International Omnipod revenues of $90.2 million rose 5.7% (up 18.6% at CER). U.S. Omnipod revenues grew 45% year over year to $276.2 million.
The Drug Delivery business revenues totaled $3.3 million, down 89.7% year over year.
Margins
Gross profit in the reported quarter was $217.3 million, up 1.9% from the prior-year quarter. Gross margin of 58.8% contracted a significant 1051 basis points.
Selling, general & administrative expenses rose 18.6% to $144.3 million. Research and development expenses rose 18.4% year over year to $49.5 million.
Insulet Corporation Price, Consensus and EPS Surprise
Insulet Corporation price-consensus-eps-surprise-chart | Insulet Corporation Quote
The operating margin contracted 980 basis points to 6.4%.
Cash Position
Insulet exited 2022 with cash and cash equivalents of $674.7 million, compared with $791.6 million at the end of 2021.
2023 Guidance
Insulet has provided its guidance for 2023.
For 2023, the company expects its revenue growth in the range of 14-19% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.46 billion.
Insulet’s Total Omnipod revenue growth is now expected in the range of 17-22% at CER. The company currently expects Drug Delivery revenues to fall in the range of 55-45 % at CER.
For the first quarter of 2023, Insulet projects revenue growth of 11-14% at CER. The Zacks Consensus Estimate for total revenues is pegged at $326.8 million.
Total Omnipod revenues are likely to grow 22-25% at CER. However, Drug Delivery revenues are expected to fall in the range of 100-95% at CER.
Our Take
Insulet exited the fourth quarter of 2022 with better-than-expected earnings and revenues. The company’s performance benefited from record quarterly U.S. and Total Omnipod new customer starts. This was driven mainly by a strong start to the company’s U.S. full market release of the Omnipod 5 automated insulin delivery system. The company recently achieved milestones of 360,000 estimated active global customers using the Omnipod System, including over 100,000 customers in the United States using Omnipod 5.
However, the substantial fall in Drug Delivery sales is discouraging. Contraction in margins does not bode well. On a year-over-year basis, the company expects gross margin to be impacted by higher costs associated with the U.S. manufacturing ramp, product line mix due to the ramp-up of Omnipod 5 and lower drug delivery revenues. Supply chain disruptions and inflationary pressures continue to challenge business operations.
Zacks Rank and Key Picks
Insulet currently carries Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
BD, carrying a Zacks Rank #2 (Buy), reported first-quarter fiscal 2023 adjusted EPS of $2.98, beating the Zacks Consensus Estimate by 11.6%. Revenues of $4.59 billion outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 7.8%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average being 6.5%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.