Yahoo Finance Tandem Diabetes (TNDM) Q1 Earnings Miss, Gross Margin Dips
Tandem Diabetes Care, Inc. TNDM reported an adjusted loss per share of 63 cents for the first quarter of 2023 compared with an adjusted loss of 23 cents per share in the year-ago period. This figure also compared unfavorably with the Zacks Consensus Estimate of a loss of 56 cents per share.
On a GAAP basis, the loss was $1.92 per share in the first quarter compared with a loss of 23 cents a year ago.
Revenues
GAAP revenues in the quarter came in at $169.4 million, down 3.7% year over year and missed the Zacks Consensus Estimate by 1.3%. According to the company, this figure was in line with the high end of its expectations and excluded the deferral associated with the U.S. Tandem Choice program that was launched in late 2022.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote
In September 2022, the company began offering the Tandem Choice Program to eligible t:slim X2 customers to provide a pathway to ownership of its newest hardware platform when available. Based on that, the company is now reporting adjusted revenues as well.
Non-GAAP revenues were $171.4 million in the reported quarter on 23,055 pump shipments worldwide.
Quarter in Detail
Total sales in the United States came in at $131.2 million in the quarter under review on a GAAP basis, down 0.08% year over year. U.S. sales were $133.3 million on a non-GAAP basis. The company shipped 17,003 pumps in Q1, down 8.9% from the year-ago period.
The company registered GAAP sales of $38.1 million outside the United States (same on a non-GAAP basis), recording a 14.6% decline from first-quarter 2022.
Margins
Gross profit in the first quarter was $82.9 million, marking an 8.9% year-over-year decline. The gross margin was 48.9%, reflecting a contraction of 284 basis points (bps).
Selling, general and administrative expenses rose 22.6% to $89.8 million in the quarter under review. Research and development expenses increased 27.1% to $42.2 million.
The company registered an adjusted operating loss of $49.1 million in the first quarter, much wider than the year-ago operating loss of $15.3 million.
Financial Position
Tandem Diabetes exited the first quarter of 2023 with cash and cash equivalents, and short-term investments of $519.6 million compared with $616.9 million recorded at the end of 2022.
2023 Guidance
Tandem Diabetes reaffirmed its sales guidance for 2023.
For the year, non-GAAP sales were reiterated in the range of $885-$900 million, indicating annual sales growth of 10% to 12%. The Zacks Consensus Estimate for 2023 revenues is pegged at $888.8 million.
Full-year non-GAAP sales guidance for the United States was reaffirmed in the range of $650-$660 million.
Full-year non-GAAP sales guidance for outside the United States was reaffirmed in the band of $235-$240 million.
Our Take
Tandem Diabetes exited the first quarter with lower-than-expected figures. The company recorded a year-over-year sales decline with a dip in U.S. and outside-U.S. pump shipments in the quarter. Escalating costs and expenses put pressure on margins.
Zacks Rank and Key Picks
Tandem Diabetes currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation EW, Intuitive Surgical, Inc. ISRG and Johnson & Johnson JNJ.
Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and came in line in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.
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