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Insulet (PODD) Q2 Earnings Miss Estimates, '22 Sales View Up

Insulet Corporation PODD announced an adjusted loss of 6 cents per share in second-quarter 2022 against earnings of 10 cents a year ago.

The Zacks Consensus Estimate for earnings was pegged at 21 cents per share for the reported quarter. Our model projected earnings of 20 cents per share for the second quarter.

GAAP loss per share was 50 cents compared to the loss of 37 cents per share in the year-ago period.

Revenues

Revenues in the second quarter totaled $299.4 million, beating the Zacks Consensus Estimate by 2.8%. Moreover, the top line jumped 13.8% from the year-ago number (up 17.7% at the constant exchange rate or CER). Quarterly revenues exceeded the company’s previous growth expectations of 12-15% at CER.

The second-quarter revenue compares to our estimate of $301.2 million.

Segment in Detail

Insulet’s Total Omnipod revenues of $285.8 million reflect an increase of 18.1% year over year (up 22.3% at CER). International Omnipod revenues of $89.4 million fell 2.4% (up 8.9% at CER). U.S. Omnipod revenues grew 30.5% year over year to $196.4 million.

For Total Omnipod, we projected $288.3 million of revenues in the second quarter.

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 $13.6 million, down 35.5% year over year.

For Drug Delivery, we projected $12.9 million of revenues in Q2.

Margins

Gross profit in the reported quarter was $190.3 million, up 4.2% from the prior-year quarter. Gross margin of 63.6% contracted 585 basis points (bps).

Our model projected a gross margin of 68.1% in the second quarter.

Meanwhile, selling, general & administrative expenses rose 49.9% to $174.4 million. However, research and development expenses rose 6.2% year over year to $42.6 million.

Operating loss for the second quarter totaled $26.7 million against the operating income of $26.3 million in the prior-year quarter.

Cash Position

Insulet exited the second quarter of 2022 with cash and cash equivalents of $708.6 million compared with $709.6 million at the end of the first quarter of 2022.

2022 Guidance

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

For 2022, the company raised its revenue growth expectation in the range of 14-17% at CER (the prior projection was in the band of 12-16% at CER). The Zacks Consensus Estimate for total revenues is pegged at $1.23 billion.

Insulet’s Total Omnipod revenue growth is now expected in the range of 18-21% at CER (compared to the previously estimated 16-20% at CER). The company currently expects Drug Delivery revenues to fall in the range of 40-35% at CER (down from the previously estimated 35-30% at CER).

For the third quarter of 2022, Insulet projects revenue growth of 17-20% at CER. The Zacks Consensus Estimate for total revenues is pegged at $307.30 million.

Total Omnipod revenues are likely to grow 18-21% at CER. However, Drug Delivery revenues are expected to fall in the range of 14-5% at CER.

Our Take

Insulet exited the second quarter of 2022 with better-than-expected revenues. The company’s performance benefitted from record quarterly U.S. and Total Omnipod new customer starts. The full market release of the Omnipod 5 Automated Insulin Delivery System (Omnipod 5) in the United States instills optimism. The favorable study results backing the safety and efficacy of Omnipod 5 for type 1 diabetes are encouraging. The latest introduction of the Omnipod DASH in the United Arab Emirates and Saudi Arabia markets seems promising as well. The raised sales guidance for 2022 is indicative of this growth momentum continuing.

However, the substantial fall in Drug Delivery sales is discouraging. Contraction in gross margin does not bode well. The company incurred an operating loss in the quarter, raising apprehension. Supply chain disruptions and inflationary pressures continue to challenge business operations.

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 Quest Diagnostics Incorporated DGX, Molina Healthcare, Inc. MOH and Merck & Co. MRK.

Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quest Diagnostics has an earnings yield of 6.9% compared with the industry’s 3.9%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.

Molina Healthcare, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $ 4.55, which beat the Zacks Consensus Estimate by 4.8%. Revenues of $8.1 billion outpaced the consensus mark by 6.2%.

Molina Healthcare has a long-term estimated growth rate of 16.4%. MOH’s earnings surpassed estimates in the trailing four quarters, the average being 3.2%.

Merck reported second-quarter 2022 adjusted earnings of $1.87 per share, beating the Zacks Consensus Estimate of $1.67. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.

Merck has a long-term estimated growth rate of 10.1%. MRK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 16.8%.


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