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Tandem Diabetes (TNDM) Q3 Loss Narrows Y/Y, Sales Improve

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Tandem Diabetes Care, Inc. (TNDM - Free Report) reported loss per share of 9 cents in third-quarter 2019, significantly narrower than the year-ago loss of 62 cents. The Zacks Consensus Estimate was pegged at loss of 20 cents per share.

Revenues in Detail

Revenues in the quarter were $94.7 million, surpassing the Zacks Consensus Estimate by 7%. The top line skyrocketed 104.6% from the year-earlier period’s $46.3 million 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 third quarter.

In the quarter, Tandem Diabetes’ global pump shipments soared 111.5% year over year to 17,839 units. Of these, 4,025 pumps were shipped to international markets. Accordingly, Tandem Diabetes registered international sales of $15.8 million in the period.

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

Domestic pump shipments surged 87.2% year over year to 13,814 units. Domestic sales were $78.8 million, up 80.3% year over year.

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

Margins

Gross profit in the reported quarter was $50.7 million, marking significant 132.5% growth from the prior-year period. Gross margin was 53.5%, expanding 643 basis points (bps).

Total operating expenses were $56.7 million, up 51.1% year over year. Operating loss in the quarter under review was $6 million compared with $15.7 million a year ago.

Financial Position

Tandem Diabetes exited the third quarter of 2019 with cash and cash equivalents of $156.9 million compared with $131.4 million in the last reported quarter.

Guidance

Banking on a promising third-quarter show, Tandem Diabetes has increased the lower end of its sales estimates to $358-$365million (from $350-$365 million mentioned earlier). The updated range indicates annual sales growth of around 95-99%. The Zacks Consensus Estimate for the top line is pegged at $359.3 million, which lies within the company’s projected range.

Our Take

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

However, its heavy dependence on insulin pump sales and recurring operating loss are concerning.

Zacks Rank & Stocks to Consider

Currently, Tandem Diabetes carries a Zacks Rank #3 (Hold).

Some better-ranked medical device companies, which posted solid results this earnings season, are ResMed Inc (RMD - Free Report) , NuVasive, Inc (NUVA - Free Report) and Thermo Fisher Scientific Inc (TMO - Free Report) .

ResMed, with a Zacks Rank #2 (Buy), reported first-quarter fiscal 2020 adjusted EPS of 93 cents, surpassing the Zacks Consensus Estimate by 6.9%. Its revenues of $681.1 million outpaced the consensus mark by 3.7%.

NuVasive’s third-quarter 2019 adjusted EPS of 59 cents surpassed the Zacks Consensus Estimate by 9.3%. Its revenues totaled $290.8 million, which surpassed the consensus estimate by 2.4%. The stock currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher, with a Zacks Rank #2, delivered third-quarter 2019 adjusted EPS of $2.94, beating the Zacks Consensus Estimate by 2.1%. Its revenues of $6.27 billion beat the Zacks Consensus Estimate by 1.3%.

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