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Tandem (TNDM) Q2 Loss Narrower Than Expected, Sales Top Mark

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Tandem Diabetes Care, Inc. (TNDM - Free Report) reported loss per share of 3 cents in second-quarter 2019, significantly narrower than the year-ago loss of $1.17.  The figure was also narrower than the Zacks Consensus Estimate of a loss of 23 cents.

Revenues in Detail

Revenues in the quarter totaled $93.3 million, surpassing the Zacks Consensus Estimate by 33.3%. The top line skyrocketed 173% from the year-earlier period on strong domestic demand for the t:slim X2 insulin pump.

Per management, the rollout 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 second quarter.

In the quarter, Tandem Diabetes’ global pump shipments soared 290% year over year to 21, 258 pumps. Of these, 8459 pumps were shipped to international markets. Accordingly, Tandem Diabetes registered international sales of $22.9 million in the period.Domestic pump shipments surged 135% year over year to 12,799 pumps. Domestic sales came in at $70.4 million, up 106% year over year.

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

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

Margins

Gross profit in the reported quarter came in at $49.9 million, up a significant 230.8% from the prior-year period. Gross margin came in at 53.5%, expanding 930 basis points (bps).

Total operating expenses came in at $51.8 million, up 77.9% year over year. Operating loss in the quarter under review was $1.9 million compared with $13.9 million a year ago.

Guidance

Banking on a promising second-quarter show, Tandem raised its full-year sales projection to $350-365 million from the earlier range of $300-$315 million. The raised range indicates annual sales growth of around 90-99%. The Zacks Consensus Estimate for the top line is pegged at $359.3 million, significantly above management’s projected range.

Our Take

Tandem Diabetes delivered better-than-expected results in the second quarter. Strength in the t:slim X2 Insulin pump’s domestic sales, the company’s expansion in international markets as well as a robust product pipeline drove the top line significantly during the quarter. We are impressed with the strong surge in global pump shipments. The company’s raised sales forecast for 2019 also looks promising. 

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

Zacks Rank and Other Key Picks

Tandem Diabetes currently carries a Zacks Rank #2 (Buy).

A few other top-ranked companies, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion beat the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company has a Zacks Rank #2..

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