Insulet (PODD) Q3 Earnings Beat, 2023 Sales Growth View Up
Insulet Corporation PODD reported adjusted earnings per share (EPS) of 71 cents for third-quarter 2023, improving from the year-ago period’s adjusted EPS of 45 cents per share.
Third-quarter 2023 adjusted earnings exceeded the Zacks Consensus Estimate by 77.5%.
The quarter’s adjustment excludes a charge associated with a voluntary medical device correction notice issued to replace the Omnipod DASH Personal Diabetes Managers.
GAAP EPS was 74 cents against a net loss of 8 cents per share in the year-ago period.
Revenues
Revenues in the third quarter totaled $432.7 million, beating the Zacks Consensus Estimate by 4.6%. The top line jumped 27% from the year-ago quarter’s number (up 25.1% at the constant exchange rate or CER).
Segment in Detail
Insulet’s Total Omnipod revenues of $380.5 million reflected an increase of 33.2% year over year (up 33% at CER). International Omnipod revenues of $103.7 million rose 16% (up 15.5% at CER). U.S. Omnipod revenues grew 40.9% year over year to $276.8 million.
Total Omnipod revenues of $422.0 million marked an increase of 29.4% or 27.5% in constant currency.
The Drug Delivery business revenues totaled $10.7 million, down 27.2% year over year.
Margins
Gross profit in the reported quarter was $293.3 million, up 55.8% from the prior-year quarter’s levels. Gross margin of 67.8% expanded 1253 basis points year over year.
Selling, general & administrative expenses rose 28.7% to $180.7 million.
Research and development expenses rose 28.4% year over year to $57.8 million.
Insulet Corporation Price, Consensus and EPS Surprise
Insulet Corporation price-consensus-eps-surprise-chart | Insulet Corporation Quote
The operating profit in the quarter was $54.8 million, surging from the year-ago quarter’s operating profit of $2.9 million. Operating margin expanded 1181 basis points year over year.
Cash Position
Insulet exited the third quarter of 2023 with cash and cash equivalents of $685.4 million compared with $674.7 million at the end of the second quarter.
2023 Guidance
Insulet updated full-year 2023 guidance and provided a fourth-quarter 2023 outlook.
For 2023, the company raised its revenue growth guidance to the range of 26-27% (up from the earlier band of 22-25%). The Zacks Consensus Estimate for total revenues is pegged at $1.57 billion, suggesting a 20.3% growth from the year-ago reported number.
Insulet’s Total Omnipod revenue growth is expected in the range of 29-30% (25-28% expected previously). The company reiterated its expectation of Drug Delivery revenue decline to 50-45%.
For the fourth quarter of 2023, Insulet projects revenue growth of 22-25%. The Zacks Consensus Estimate for total revenues is pegged at $397.3 million.
Total Omnipod revenues are likely to grow 22-25%. Drug Delivery revenues are expected to be in the range of 0-70% ((approximately $3 million to $5 million).
Our Take
Insulet exited the third quarter of 2023 with better-than-expected earnings and revenues. The company’s performance benefited as a result of the continued high demand for Omnipod 5 – both in the United States and globally. During the quarter, Insulet received FDA 510(k) clearance for the Omnipod 5 iOS App and expects to begin a U.S. limited market release in early 2024. The company commercially launched Omnipod 5 in Germany — the second European Omnipod 5 launch — with the intent to launch Omnipod 5 more broadly across Europe starting in 2024. The expansion of both margins is encouraging. The raised 2023 revenue guidance instills optimism.
However, the decline in the Drug Delivery business is discouraging. Further, supply chain disruptions and inflationary pressure continue to challenge business operations. Increasing expenses continue to be a concern.
Zacks Rank and Other Key Picks
Insulet currently carries Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories ABT, Inari Medical NARI and Integer Holdings Corporation ITGR.
Abbott, carrying a Zacks Rank of 2, reported adjusted EPS of $1.14 in third-quarter 2023, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
Inari Medical, carrying a Zacks Rank #2, reported adjusted EPS of 4 cents in third-quarter 2023, beating the Zacks Consensus Estimate by a staggering 128.6%. Revenues of $119 million outpaced the consensus estimate by 2.3%.
Inari Medical has an estimated earnings growth rate of 725% for the following year. Inari Medical’s earnings surpassed estimates in all the trailing four quarters, the average being 66.8%.
Integer Holdings reported a third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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