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Tandem Diabetes (TNDM) Q2 Earnings & Revenues Top Estimates

Zacks Equity Research
·4 mins read

Tandem Diabetes Care, Inc. TNDM reported adjusted loss per share of 19 cents for second-quarter 2020, wider than the year-ago metric of a loss of 3 cents. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 24 cents.

Reported net loss came in at 45 cents per share, wider than the year-ago loss of 3 cents.

Revenues in the quarter came in at $109.2 million, beating the Zacks Consensus Estimate by 26.2%. The top line surged 17.1% year over year despite sales pressure due to COVID-19. Per management, this quarter represented the highest quarterly sales.

Q2 in Detail

Tandem Diabetes registered international sales of $20 million in the quarter under review, recording a 13% plunge from second-quarter 2019. Domestic sales came in at $89.3 million, up 27% year on year.

International pump shipments were down 53% to 3,952 pumps. Domestic pump shipments jumped 15% year over year to 14,735 units.

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

 

Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise
Tandem Diabetes Care, Inc. Price, Consensus and EPS Surprise

Tandem Diabetes Care, Inc. price-consensus-eps-surprise-chart | Tandem Diabetes Care, Inc. Quote

The company believes that the surge in domestic pump shipments resulted from the appeal of the easy-to-use pump with the ability to offer remote software updates and rising customer awareness of its Control-IQ technology.

Margins

Gross profit in the June-end quarter was $54.4 million, marking an 8.9% year-over-year growth. Gross margin was, however, 49.8%, down 372 basis points (bps).

Total operating expenses were $66.4 million, up 28.3% year over year. The company registered operating loss of $12 million in the second quarter, wider than a loss of $1.9 million a year ago.

Financial Position

Tandem Diabetes exited the second quarter with cash and cash equivalents, and short-term investments of $426.3 million compared with $160.2 million recorded at the end of the first quarter of 2020.

2020 Guidance

Based on the strength in demand for t:slim X2 insulin pump across the globe, Tandem Diabetes has reinstated the sales guidance set at the beginning of 2020. Although the company is optimistic about its Control-IQ technology (based on favorable customer feedback) and its scaling international launch, along with UnitedHealthcare’s recent decision to include Tandem Diabetes as a network provider, it remains apprehensive about the coronavirus-led uncertainties.

For the year, sales are estimated in the range of $450-$465 million, including international sales of $70-$75 million. This represents annual sales growth of 24-28% compared to 2019. The Zacks Consensus Estimate for 2020 revenues is pegged at $416.1 million.

Our Take

Tandem Diabetes delivered better-than-expected results in the second quarter. A robust top line despite the pandemic-led business disruptions is impressive. Strong domestic pump sales and pump shipments buoy optimism. Continued strength in demand for t:slim X2 insulin pump across the globe and rising customer awareness of the company’s Control-IQ technology look encouraging. The company’s full-year sales forecast also looks upbeat amid the coronavirus crisis.

However, the year-over-year widening of the company’s loss per share along with a dismal international performance is concerning. Contraction of both margins is also disappointing.

Zacks Rank & Stocks to Consider

Currently, Tandem Diabetes carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. WST, Thermo Fisher Scientific Inc. TMO and PerkinElmer, Inc. PKI. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical reported second-quarter 2020 adjusted EPS of $1.25, beating the Zacks Consensus Estimate by 37.4%. Net revenues of $527.2 million outpaced the consensus estimate by 6.9%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

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