DexCom Beats, Sees Narrower Loss

Zacks

DexCom, Inc. (DXCM) reported a narrower loss of $6.0 million or 8 cents per share in the third quarter of the year compared with $17.3 million or 25 cents in the comparable quarter of 2012 as well as the Zacks Consensus Estimate of a loss of 13 cents.

DexCom’s total revenue surged 85.7% to $42.9 million, topping the Zacks Consensus Estimate of $36.0 million, on product revenues that more than doubled to $42.5 million from $21.1 million a year ago. Meanwhile, development grant and other revenues plunged 80.0% to $0.4 million from $2.0 million in the prior year quarter.  

Product gross profit more than tripled to $27.7 million in the quarter from $7.7 million in the third quarter of 2012. Total gross profit increased in the same magnitude to $27.6 million from $8.4 million a year ago while gross margin improved significantly to 64.3% from 36.4% in the 2012-quarter.

Product cost of sales rose 10.4% to $14.8 million from $13.4 million for the third quarter in 2012, driven by higher volume of product sales. Total cost of sales grew 4.1% to $15.3 million from $14.7 million for the third quarter of 2012.

Research and development expenses increased 14.6% to $11.8 million from $10.3 million in the third quarter of 2012. Selling, general and administrative expense soared 40.3% to $21.6 million from $15.4 million a year ago, due to additional payroll costs, share-based compensation and commissions.

DXCM had cash and cash equivalents of $33.4 million as of Sep 30, 2013, significantly up from $8.1 million as of Dec 31, 2012. Total debt remained flat at $7.0 million as of Sep 30, 2013 compared with the same as of Dec 31, 2012.

Calif.-based DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring systems. The company relies significantly on its base of recurring revenue which reflects increasing usage rate with existing patients. Thus, higher patient base will bolster top-line for DexCom.

DXCM currently retains a Zacks Rank #3 (Hold). Currently, other medical stocks that are performing well in the medical instruments industry include Cynosure, Inc. (CYNO), CryoLife, Inc. (CRY) and Natus Medical Inc. (BABY). All of them carry a Zacks Rank #1 (Strong Buy).

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