Insulet (PODD) Q3 Earnings Miss Estimates, Revenues Top

Insulet Corporation PODD announced third-quarter 2021 adjusted earnings per share (EPS) of 20 cents, reflecting a 17.6% improvement from the year-ago earnings of 17 cents. Earnings missed the Zacks Consensus Estimate by 9.1%.

The quarter’s adjustments exclude the impact from loss on extinguishment of debt of $1.5 million related to the company's repurchase of convertible notes.

On a GAAP basis, Insulet reported EPS of 18 cents per share for third-quarter 2021.

Revenues

Revenues in the third quarter totaled $275.6 million, beating the Zacks Consensus Estimate by 1.1%. Moreover, the top line jumped 17.8% from the year-ago number (up 16.9% at constant exchange rate or CER). Notably, quarterly revenues were within the company’s previous growth expectations of 11-18% at CER.

Segment in Detail

Insulet’s third-quarter total Omnipod revenues of $260.3 million reflect an increase of 22.7% year over year (up 21.7% at CER). International Omnipod revenues of $93.1 million rose 16.7% (up 14.1% at CER). U.S. Omnipod revenues grew 26.4% year over year to $167.2 million.

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 $15.3 million, down 30.1% year over year.

Margins

Gross profit in the reported quarter was $188.7 million, up 24.3% from the prior-year quarter. Gross margin of 68.5% expanded 360 basis points (bps).

Meanwhile, selling, general & administrative expenses rose 31.7% to $117.5 million. Research and development expenses fell 3.4% year over year to $37.5 million.

Operating income totaled $33.7 million, reflecting a 41.6% rise from the prior-year quarter. Accordingly, operating margin in the third quarter expanded 206 bps to 12.2%.

Cash Position

Insulet exited the third quarter of 2021 with cash and cash equivalents of $857.1 million compared with $872.1 million at the end of second-quarter 2021.

Guidance

Insulet has updated its financial outlook for fourth-quarter 2021 and full-year 2021.

For the year, the company expects to maintain its revenue guidance at the range of 18-20% (up from the previously-guided range of 16-20%). The Zacks Consensus Estimate for total revenues is pegged at $1.08 billion.

Insulet’s total Omnipod revenue projection has been lowered to 18-20% at CER (previous guided range was 18-21%). Meanwhile, the company raised its outlook for the Drug Delivery arm, which is now pegged in the range of 11-16% (up from the previous range of a fall of 11% to growth of 4%).

For the fourth quarter of 2021, Insulet projects revenue growth of 19-25% at CER (up from the previous guided range of 11-18%). The Zacks Consensus Estimate for total revenues is pegged at $293.1 million.

Total Omnipod revenues are likely to grow 17-22% at CER. However, Drug Delivery revenues are expected in the range of 45-65%.

Our Take

Insulet exited the third quarter of 2021 on a mixed note with lower-than-expected adjusted earnings and better-than-expected revenues. On a positive note, there has been a year-over-year improvement in the top line on solid uptake of the Omnipod system, both in the United States and international markets. This growth amid the pandemic was primarily due to robust revenue growth in the Omnipod product line. The data presented at EASD 2021 demonstrating the efficacy of the Omnipod 5 Automated Insulin Delivery System buoys optimism for the stock. Expansion of both margins is another upside. The raised full-year and fourth quarter 2021 revenues outlook is indicative of the continuation of this bullish trend.

However, the decline of Drug Delivery sales in the reported quarter is discouraging. Overall, the continued pandemic-led choppy market conditions raise apprehensions.

Zacks Rank and Other Key Picks

Insulet currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. MEDP, Thermo Fisher Scientific Inc. TMO and West Pharmaceutical Services, Inc. WST.

Medpace, currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher Scientific reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #1.

West Pharmaceutical Services, carrying a Zacks Rank #2, reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the consensus mark by 3.2%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report

Insulet Corporation (PODD) : Free Stock Analysis Report

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

To read this article on Zacks.com click here.

Zacks Investment Research