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DexCom (DXCM) Earnings and Revenues Beat Estimates in Q3
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DexCom, Inc. (DXCM - Free Report) reported adjusted earnings of 65 cents per share in third-quarter 2019, surpassed the Zacks Consensus Estimate of 18 cents by a huge mark. Moreover, the bottom line skyrocketed 261.1% from the prior-year quarter.
Total revenues surged 48.6% to $396.3 million on a year-over-year basis and also surpassed the Zacks Consensus Estimate by 13.5%. Rising volumes across all channels, strong new patient additions and increasing global awareness of the benefits of real-time CGM contributed to the upside.
Segmental Details
Revenues at the Sensor segment (80% of total revenues) surged 63.5% on a year-over-year basis to $317.2 million. Transmitter revenues (16%) improved 27.4% year over year to $61.8 million. Receiver revenues (4%) declined 28.5% year over year to $17.3 million.
U.S. revenues (78% of total revenues) surged 52.6% on a year-over-year basis to $308.8 million. International revenues (22%) improved 36.1% year over year to $87.5 million.
Margin Analysis
Gross profit in the quarter under review totaled $246.9 million, up 46.4% year over year. However, DexCom generated gross margin (as a percentage of revenues) of 62.3%, which contracted 90 bps year over year.
Research and development (R&D) expenses amounted to $66.7 million in the quarter, up 33.1% year over year. Selling, general and administrative expenses totaled $124.2 million in the reported quarter, up 18.7% year over year.
The company reported total operating expenses of $190.9 million, up 23.4% year over year.
The company reported operating income of $56 million, compared with the year-ago quarter’s figure of $13.9 million.
Financial Position
As of Sep 30, 2019, DexCom had $1.43 billion in cash and marketable securities.
Total cash and cash equivalents came in at $395.6 million, down 44.2% sequentially.
2019 Guidance Revised
DexCom now expects revenues in the range of $1.43-$1.45 billion (up from the previously guided range of $1.33-$1.38 billion). The Zacks Consensus Estimate for revenues is currently pegged at $1.36 billion, which is below the lower end of the guided range.
Gross profit margin is projected to be around 63% compared with the prior estimated range of 64% to 65% of net revenues.
While adjusted operating margin is expected to be about 9% of net revenues (up from the previous projection of 7%), adjusted EBITDA margin is anticipated to be 19.5% (up from the prior estimate of 18.5%).
Wrapping Up
DexCom exited the third quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contributions from the Sensor and Transmitter segments were key catalysts. Strong guidance also instills investor optimism in the stock.
Additionally, the glucose monitoring market presents significant commercial opportunity for this company. DexCom’s opportunities in alternative markets such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
The company has sustained robust revenue growth momentum in the third quarter, which resulted in another substantial increase in the full year revenue outlook.
Meanwhile, cutthroat competition in the market for blood & glucose monitoring devices remains a concern. We believe that the company’s margins will continue to remain under pressure in the upcoming quarters owing to high product development costs and rising expenditures on the R&D front.
Zacks Rank
Currently, DexCom carries a Zacks Rank of 2 (Buy).
Edwards Lifesciences delivered fourth-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Fourth-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.
Thermo Fisher delivered fourth-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.
ResMed reported fourth-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.
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DexCom (DXCM) Earnings and Revenues Beat Estimates in Q3
DexCom, Inc. (DXCM - Free Report) reported adjusted earnings of 65 cents per share in third-quarter 2019, surpassed the Zacks Consensus Estimate of 18 cents by a huge mark. Moreover, the bottom line skyrocketed 261.1% from the prior-year quarter.
Total revenues surged 48.6% to $396.3 million on a year-over-year basis and also surpassed the Zacks Consensus Estimate by 13.5%. Rising volumes across all channels, strong new patient additions and increasing global awareness of the benefits of real-time CGM contributed to the upside.
Segmental Details
Revenues at the Sensor segment (80% of total revenues) surged 63.5% on a year-over-year basis to $317.2 million. Transmitter revenues (16%) improved 27.4% year over year to $61.8 million. Receiver revenues (4%) declined 28.5% year over year to $17.3 million.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. price-consensus-eps-surprise-chart | DexCom, Inc. Quote
Geographical Details
U.S. revenues (78% of total revenues) surged 52.6% on a year-over-year basis to $308.8 million. International revenues (22%) improved 36.1% year over year to $87.5 million.
Margin Analysis
Gross profit in the quarter under review totaled $246.9 million, up 46.4% year over year. However, DexCom generated gross margin (as a percentage of revenues) of 62.3%, which contracted 90 bps year over year.
Research and development (R&D) expenses amounted to $66.7 million in the quarter, up 33.1% year over year. Selling, general and administrative expenses totaled $124.2 million in the reported quarter, up 18.7% year over year.
The company reported total operating expenses of $190.9 million, up 23.4% year over year.
The company reported operating income of $56 million, compared with the year-ago quarter’s figure of $13.9 million.
Financial Position
As of Sep 30, 2019, DexCom had $1.43 billion in cash and marketable securities.
Total cash and cash equivalents came in at $395.6 million, down 44.2% sequentially.
2019 Guidance Revised
DexCom now expects revenues in the range of $1.43-$1.45 billion (up from the previously guided range of $1.33-$1.38 billion). The Zacks Consensus Estimate for revenues is currently pegged at $1.36 billion, which is below the lower end of the guided range.
Gross profit margin is projected to be around 63% compared with the prior estimated range of 64% to 65% of net revenues.
While adjusted operating margin is expected to be about 9% of net revenues (up from the previous projection of 7%), adjusted EBITDA margin is anticipated to be 19.5% (up from the prior estimate of 18.5%).
Wrapping Up
DexCom exited the third quarter on a strong note, wherein both earnings and revenues beat the Zacks Consensus Estimate. Impressive contributions from the Sensor and Transmitter segments were key catalysts. Strong guidance also instills investor optimism in the stock.
Additionally, the glucose monitoring market presents significant commercial opportunity for this company. DexCom’s opportunities in alternative markets such as the non-intensive diabetes management space, the hospital, gestational, pre-diabetes and obesity are likely to provide it a competitive edge in the MedTech space.
The company has sustained robust revenue growth momentum in the third quarter, which resulted in another substantial increase in the full year revenue outlook.
Meanwhile, cutthroat competition in the market for blood & glucose monitoring devices remains a concern. We believe that the company’s margins will continue to remain under pressure in the upcoming quarters owing to high product development costs and rising expenditures on the R&D front.
Zacks Rank
Currently, DexCom carries a Zacks Rank of 2 (Buy).
Earnings of Other MedTech Majors at a Glance
Some other top-ranked stocks that reported solid results this earning season are Edwards Lifesciences (EW - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and ResMed Inc. (RMD - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences delivered fourth-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Fourth-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.
Thermo Fisher delivered fourth-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.
ResMed reported fourth-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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