DexCom climbs on strong 3Q sales and outlook

DexCom rises as 3rd-quarter sales exceed estimates and company says it will surpass guidance

Associated Press

NEW YORK (AP) -- Shares of DexCom jumped Thursday after the medical device maker's third-quarter sales surpassed Wall Street forecasts.

THE SPARK: DexCom said Wednesday that it lost $6 million, or 8 cents per share, in the latest quarter. A year ago it lost $17.3 million, or 25 cents per share. Revenue climbed to $42.9 million from $23.1 million as its product revenue doubled to $42.5 million.

Analysts expected the company to take a loss of 13 cents per share on $35.8 million in revenue, according to FactSet.

THE BIG PICTURE: DexCom makes wireless systems that diabetes patients can use to monitor their blood sugar. The Food and Drug Administration approved its G4 Platinum system in 2012. The company says G4 Platinum is more accurate than its older system Seven Plus, especially when patients are hypoglycemic. It has a smaller sensor and longer transmission range. It also it sends an alert if the patient's blood sugar gets to a specific low level and offers customizable alerts.

The San Diego company said it expects to exceed its forecast of $140 million in revenue this year, and it ultimately expects revenue to grow at an annual rate of about 40 percent.

Analysts expect DexCom to report $140.8 million in revenue in 2013.

THE ANALYSIS: Benchmark Co. analyst Jan Wald said new users, sensor sales, and sensor use are increasing. He said the marketing is accepting G4 Platinum, and DexCom will now be able to focus on expanding its use and enhancing the features of the device.

Wald rates the shares "Buy" with a price target of $40.

SHARE ACTION: Shares of DexCom gained $5.79, or 21.3 percent, to $33.03 in afternoon trading. The stock has more than doubled in value in 2013 and is trading at all-time highs. It went as high as $33.73 on Thursday.

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