Yahoo Finance Tandem Diabetes (TNDM) Q4 Earnings Beat, Gross Margin Dips
Tandem Diabetes Care, Inc. TNDM reported an adjusted loss per share of 1 cent for the fourth quarter of 2022 against adjusted earnings of 16 cents per share in the year-ago period. This figure however compared favorably with the Zacks Consensus Estimate of a loss of 2 cents per share.
On a GAAP basis, the loss was 25 cents per share in the fourth quarter against earnings of 17 cents a year ago.
Revenues
GAAP revenues in the quarter came in at $220.5 million, up 5% year over year but missed the Zacks Consensus Estimate by 1.1%. The GAAP sales reflect an accounting deferral related to the recent introduction of the company’s Tandem Choice program in the United States.
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 providing adjusted revenues as well.
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote
Non-GAAP revenues were $223.4 million in the reported quarter on 36,000 pump shipments worldwide.
Quarter in Detail
Total sales in the United States came in at $165.8 million in the quarter under review on a GAAP basis, up 3% year over year. U.S. sales were $168.7 million on a non-GAAP basis. The company shipped 24,000 pumps in Q4, reflecting an increase in both new and renewal pump shipments from Q3.
The company registered GAAP sales of $54.7 million outside the United States (same on a non-GAAP basis), recording a 11.4% rise from fourth-quarter 2021.
Margins
Gross profit in the fourth quarter was $115.5 million, marking 1.6% year-over-year growth. The gross margin was 52.4%, reflecting a contraction of 177 basis points (bps).
Selling, general and administrative expenses rose 36.6% to $97.7 million in the quarter under review. Research and development expenses increased 20.1% to $35.6 million.
The company registered an adjusted operating loss of $17.8 million in the fourth quarter, a huge slash from the year-ago operating profit of $12.7 million.
Financial Position
Tandem Diabetes exited 2022 with cash and cash equivalents, and short-term investments of $616.9 million compared with $623.8 million recorded at the end of 2021.
2023 Guidance
Tandem Diabetes initiated its guidance for 2023.
For the year, non-GAAP sales are projected 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 $802.8 million.
Full-year non-GAAP sales guidance for the United States is in the range of $650-$660 million.
Full-year non-GAAP sales guidance for outside the United States is estimated in the band of $235-$240 million.
Our Take
Tandem Diabetes exited the fourth quarter with better-than-expected bottom-line figures. However, total GAAP revenue missed the estimate. The company delivered year-over-year sales growth, U.S. and outside-U.S. pump shipments in the quarter. However, escalating costs and expenses put pressure on margins.
Zacks Rank and Key Picks
Tandem Diabetes currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, McKesson Corporation MCK and Hologic, Inc. HOLX.
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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