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Insulet (PODD) Q1 Earnings Surpass Estimates, Margins Grow

·5-min read

Insulet Corporation PODD announced first-quarter 2022 adjusted earnings per share (EPS) of 40 cents against break-even earnings in the year-ago period. Earnings surpassed the Zacks Consensus Estimate by 73.9%.

Revenues

Revenues in the first quarter totaled $295.4 million, beating the Zacks Consensus Estimate by 3.2%. Moreover, the top line jumped 17.1% from the year-ago number (up 19.3% at constant exchange rate or CER). Notably, revenues exceeded the company’s previous growth expectations of 13-16% at CER.

Segment in Detail

Insulet’s total Omnipod revenues of $269.5 million reflect an increase of 15.6% year over year (up 18% at CER). International Omnipod revenues of $95.4 million rose 6.1% (up 12.5% at CER). U.S. Omnipod revenues grew 21.5% year over year to $174.1 million.

Insulet Corporation Price, Consensus and EPS Surprise

Insulet Corporation Price, Consensus and EPS Surprise
Insulet Corporation Price, Consensus and EPS Surprise

Insulet Corporation price-consensus-eps-surprise-chart | Insulet Corporation Quote

The Drug Delivery business revenues totaled $25.9 million, up 35.6% year over year.

Margins

Gross profit in the reported quarter was $207.9 million, up 25.2% from the prior-year quarter. Gross margin of 70.9% expanded 460 basis points (bps).

Meanwhile, selling, general & administrative expenses rose 16.5% to $128.7 million. However, research and development expenses rose 5.9% year over year to $43.1 million.

Operating income totaled $37.9 million compared with operating income of $16.3 million in the prior-year quarter. Accordingly, operating margin in the first quarter expanded 637 bps to 12.8%.

Cash Position

Insulet exited the first quarter of 2022 with cash and cash equivalents of $709.6 million compared with $791.6 million at the end of 2021.

2022 Guidance

Insulet has updated its guidance for full-year 2022. The company has also provided a financial outlook for second-quarter 2022.

For 2022, the company has maintained its revenue growth expectation at the range of 12-16% at CER. The Zacks Consensus Estimate for total revenues is pegged at $1.24 billion.

Insulet’s total Omnipod revenue growth is projected in the range of 16-20% at CER (compared to the previously estimated 15-20% at CER). Meanwhile, the company has reaffirmed its Drug Delivery revenue decline estimates at the range of 30-35% at CER.

For the second quarter of 2022, Insulet projects revenue growth of 12-15% at CER. The Zacks Consensus Estimate for total revenues is pegged at $291.67 million.

Total Omnipod revenues are likely to grow 17-20% at CER. However, Drug Delivery revenues are expected to fall in the range of 37-43%.

Our Take

Insulet exited the first quarter of 2022 on a bullish note with better-than-expected adjusted earnings and revenues. The year-over-year improvement in the top line was led by solid new customer starts and increasing volume growth through the U.S. pharmacy channel. The robust uptake of the Omnipod DASH across the United States and international markets seems encouraging. The ongoing limited commercial launch of the Omnipod 5 Automated Insulin Delivery System (Omnipod 5) in the United States, which is on track for a full market release in 2022, instills optimism. The compelling type 2 feasibility study data demonstrating the efficacy of Omnipod 5 seems promising as well. Expansion of both margins is an added upside.

However, mounting operating expenses do not bode well. The projection of a significant fall in Drug Delivery sales in 2022 is discouraging too. The current volatile macroeconomic environment continues to pose challenges.

Zacks Rank & Key Picks

Insulet currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Alkermes plc ALKS, Medpace Holdings, Inc. MEDP and UnitedHealth Group Incorporated UNH.

Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.

Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.

Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.

UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.

UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.


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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report

Alkermes plc (ALKS) : Free Stock Analysis Report

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Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report

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