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Tandem Diabetes (TNDM) Q4 Earnings Beat Estimates, Margins Up

Zacks Equity Research
·4 min read

Tandem Diabetes Care, Inc. TNDM reported earnings per share of 4 cents in fourth-quarter 2019, registering a 100% year-over-year surge. The metric also compared favorably with the Zacks Consensus Estimate of a loss of 7 cents.

For full-year 2019, the company posted a loss of 42 cents per share, narrower than the year-ago loss of $2.55 as well as the Zacks Consensus Estimate of loss of 55 cents.

Revenues in the quarter were $108.4 million, beating the Zacks Consensus Estimate by a close margin of 0.6%. The top line surged 42.3% year over year on robust domestic demand for the t:slim X2 insulin pump.

Full-year revenues came in at $362.3 million, indicating a 97% surge from the year-ago period. The revenue figure, however, lagged the Zacks Consensus Estimate by 0.2%.

Q4 Revenues in Detail

Tandem Diabetes registered international sales of $10.2 million during the reported period, marking a 43% jump from fourth-quarter 2018. Domestic sales came in at $98.2 million, up 42% year on year.

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

In the fourth quarter, Tandem Diabetes’ worldwide pump shipments soared 113% year over year to 19,602 units. Of these, 2,149 pumps were shipped to international markets, significantly down 34% year over year. Domestic pump shipments, however, jumped 35% year over year to 17,453 units.

Margins

Gross profit in the December-end quarter was $60.3 million, marking 45.1% year-over-year growth. Gross margin was 55.6%, expanding 109 basis points (bps).

Total operating expenses came in at $58.1 million, flaring up 41.9% year over year. Operating margin in the fourth quarter was 1.9%, reflecting a 124-bps expansion year on year.

Financial Position

Tandem Diabetes exited 2019 with cash and cash equivalents of $176.5 million compared with the $129 million recorded at the end of 2018.

Guidance

Tandem Diabetes has issued its 2020 guidance.Sales are projected at $450-$465 million, indicating annual growth of 24-28%. The Zacks Consensus Estimate for the top line is pegged at $441.8 million, which lies below the projected range.

Our Take

Tandem Diabetes delivered better-than-expected results in the fourth quarter. Strength in the t:slim X2 Insulin pump’s domestic sales and the company’s expansion in international markets as well as a robust product pipeline drove the top line significantly during this period. We are impressed with the surge in global pump shipments. The company’s 2020 sales forecast also looks upbeat.

Zacks Rank & Other Stocks to Consider

Currently, Tandem Diabetes flaunts a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks which reported solid results this earnings season are Stryker Corporation SYK, STERIS plc STE and ResMed Inc. RMD.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Its quarterly revenues of $4.13 billion surpassed the consensus estimate by 0.7%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

STERIS reported third-quarter fiscal 2020 adjusted EPS of $1.45, beating the Zacks Consensus Estimate by 1.4%. Net revenues of $774.3 million outpaced the consensus estimate by 3.3%. The company carries a Zacks Rank of 2, at present.

ResMed currently carries a Zacks Rank #2. It reported second-quarter fiscal 2020 adjusted EPS of $1.21, surpassing the Zacks Consensus Estimate by 19.8%. Its revenues of $736.2 million outpaced the consensus mark by 1.5%.

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