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Insulet (PODD) Q4 Earnings, Revenues Top Mark, Margins Expand

Insulet Corporation PODD reported adjusted earnings per share (EPS) of $1.40 for fourth-quarter 2023, which improved from the year-ago period’s adjusted EPS of 52 cents per share.

Fourth-quarter 2023 adjusted earnings exceeded the Zacks Consensus Estimate of 67 cents by a huge 108.9%.

The quarter’s adjustment excludes a charge associated with a voluntary medical device correction notice issued to replace the Omnipod DASH Personal Diabetes Managers.

GAAP EPS for the quarter was $1.44 compared with 24 cents in the year-ago period.

The full-year adjusted EPS was $2.75, marking a 111.5% improvement from $1.30 at the end of 2022.

Revenues

Revenues in the fourth quarter totaled $509.8 million, beating the Zacks Consensus Estimate by 10.8%. The top line jumped 37.9% from the year-ago quarter’s number (up 36.6% at the constant exchange rate or CER).

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For the full year, revenues were $1.69 billion, up 30% from 2022.

Q4 in Detail

Insulet’s Total Omnipod revenues of $501 million reflected an increase of 36.7% year over year (up 35.4% at CER). International Omnipod revenues of $106.4 million rose 18% (up 12.5% at CER). U.S. Omnipod revenues grew 42.9% year over year to $394.6 million.

The Drug Delivery business revenues totaled $8.8 million, up 166.7% year over year.

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

Margins

Gross profit in the reported quarter was $361.2 million, up 66.2% from the prior-year quarter’s levels. Gross margin of 70.9% expanded 1207 basis points year over year.

Selling, general & administrative expenses rose 47.5% to $212.8 million.

Research and development expenses declined 15.2% year over year to $42 million.

The operating profit in the quarter was $106.4 million, surging from the year-ago quarter’s operating profit of $23.5 million. Operating margin of 20.9% expanded 1451 basis points year over year.

Cash Position

Insulet exited the year 2023 with cash and cash equivalents of $704.2 million, compared with $674.7 million at the end of 2022.

2024 Guidance

Insulet provided its full-year 2024 and first-quarter 2024 outlook.

For 2024, the company expects revenue growth in the range of 12-17%. The Zacks Consensus Estimate for total revenues is pegged at $1.96 billion, suggesting 15.5% growth from the 2023 reported number.

Insulet’s total Omnipod revenue growth is expected to be in the range of 13-18%. The company expects Drug Delivery revenues to decline in the range of 50-60%.

For the first quarter of 2024, Insulet projects revenue growth of 17-20%. The Zacks Consensus Estimate for total revenues is pegged at $424.5 million, suggesting 18.6% growth from the first quarter of 2023 reported number.

Total Omnipod revenues are likely to grow 22-25%. Drug Delivery revenue growth is expected to be in the range of 1020%-1220% (approximately $5 million to $6 million).

Our Take

Insulet exited the fourth quarter of 2023 with better-than-expected earnings and revenues. The company’s performance benefited as a result of the continued high demand for Omnipod 5 – both in the United States and globally. During the quarter, Insulet achieved milestones of 425,000 estimated active global customers using Omnipod products. The company also made a U.S. limited market release of Omnipod 5 integrated with Dexcom’s G7 sensor, as well as received CE Mark approval for Omnipod 5 integration with Abbott’s Freestyle Libre 2 Plus sensor.

The expansion of both margins is encouraging.

However, the decline in the Drug Delivery business is discouraging. Further, supply chain disruptions and inflationary pressure continue to challenge business operations. Increasing expenses continue to be a concern.

Zacks Rank and Other Key Picks

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

Some other top-ranked stocks from the broader medical space are Stryker Corporation SYK, Cencora, Inc. COR and Cardinal Health CAH.

Stryker, carrying a Zacks Rank #2, reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.

Cencora, carrying a Zacks Rank #2, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.

COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.

Cardinal Health, sporting a Zacks Rank #1, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.

CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.

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