Tandem Diabetes (TNDM) Q2 Earnings & Revenues Top Estimates

Tandem Diabetes Care (NASDAQ:TNDM), 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-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 (NYSE:WST), Inc. WST, Thermo Fisher Scientific Inc (NYSE:TMO). TMO and PerkinElmer (NYSE:PKI), 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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