Back to top

Image: Bigstock

Tandem's (TNDM) Q1 Loss Wider Than Expected, Sales Top Mark

Read MoreHide Full Article

Tandem Diabetes Care, Inc. ((TNDM - Free Report) reported loss per share of 40 cents in first-quarter 2019, significantly narrower than the year-ago net loss of $1.82. However, the same was wider than the Zacks Consensus Estimate of a loss of 28 cents.

Revenues in Detail

Revenues in the quarter totaled $65.9 million, surpassing the Zacks Consensus Estimate by 31%. The top line skyrocketed massively by141.4% from the year-earlier period banking on strong domestic demand for the t:slim X2 insulin pump.

Per management, the roll-out of t:slim X2 with Basal-IQ technology, increased supply capacity and renewal sales along with its international launch, strengthened the company’s core business and considerably, drove top-line growth in the first quarter.

 

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

 

In the first quarter, Tandem Diabetes’ pump shipments soared 232% year over year to 14,732 pumps. Of these, 5063 pumps were shipped to the international markets. Accordingly, Tandem Diabetes registered international sales of $11.3 million in the period.

Interestingly, the company had begun shipping pumps to select geographies for commencing its international operations last August.

Margins

Gross profit in the reported quarter came in at $33.4 million, significantly up 192.5% from the prior-year period. Gross margin came in at 50.5%, expanding 873 basis points (bps) on benefits from a number of factors.

Total operating expenses came in at $44.4 million compared with $26.9 million in the comparable quarter last year. Operating loss in the quarter under review was $10.9 million compared with the same of $15.5 million a year ago.

Guidance

Tandem has updated its outlook for 2019. The company has raised its full-year total sales to a new range of $300-$315 million (indicating annual sales growth of around 63-71% from last year’s reported figure) from earlier-provided range of $255-$270 million. The Zacks Consensus Estimate for the top line is pegged at $264.3 million, below management’s projected range.

Our Take

Tandem Diabetes delivered better-than-expected top-line results in the first quarter. While the company’s loss was wider than estimated, its revenues beat the consensus mark. Moreover, the t:slim X2 Insulin pump’s strength in domestic sales along with the company’sexpansion in the international markets as well as a robust product pipeline drove the top line significantly during the quarter. The company’s raised sales forecast for 2019 also looks promising. 

On the flip side, its heavy dependence on the sales of insulin pumps and the recurring operating losses pose a big threat.

Zacks Rank and Key Picks

Tandem Diabetes currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks flaunting solid results this earnings season are Stryker Corporation (SYK - Free Report) , Abbott Laboratories (ABT - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Meanwhile, revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

Abbott reported first-quarter 2019 adjusted EPS of 63 cents, topping the Zacks Consensus Estimate by 3.3%. Further, first-quarter worldwide sales came in at $7.54 billion, above the consensus estimate of $7.47 billion.

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which exceeded the Zacks Consensus Estimate of 54 cents. Moreover, revenues summed $218.4 million, outshining the consensus mark of $213 million.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity. A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>