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DexCom (DXCM) Q1 Loss Narrower than Expected, Revenues Miss
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DexCom Inc. (DXCM - Free Report) reported a loss of 49 cents per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 55 cents. However, the figure was wider than the loss of 23 cents reported in the year-ago quarter.
Interestingly, Dexcom posted a positive earnings surprise in the last quarter as well.
Getting back to the quarter, total revenue grew to $142 million, reflecting an increase of 22.4% from $116 million in the year-ago quarter. However, the figure lagged the Zacks Consensus Estimate of $144 million.
DexCom generated a gross margin (as a percentage of revenues) of 66%, compared with 65% for the same quarter in the prior year. Notably, gross margin was slightly below management’s anticipated range for the quarter, thanks to a drop in first-quarter sales.
International business showed continued year-over-year growth in the quarter, generating $26 million in revenues, up 37% on a year-over-year basis. Notably, international business represented 18% of total revenue in the first quarter. Particularly, Germany fueled almost 37% growth outside the U.S. in the quarter.
Research and development (R&D) expenses totaled $48 million in the quarter, compared with $32 million a year ago. The company’s R&D investments include the G6 pivotal study and related submissions with the FDA.
Selling, general and administrative expenses totaled $86 million in the reported quarter, compared with $62 million in the same quarter of 2016. The rise was primarily due to year-over-year increases in head count in customer support organizations, higher marketing expenses and escalating IT costs.
Financial Update
As of Mar 31, 2017, DexCom had $181.1 million in cash, cash equivalents and short-term marketable securities.
Guidance
This Zacks Rank #3 (Hold) company projects global revenues in the band of $710 million to $740 million, reflecting growth of approximately 25% to 30%.
For the full year, DexCom anticipates gross margin at the low end of the 67% to 70% guidance.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 33.7%.
Sunshine Heart posted a positive earnings surprise of 58.24% in the last reported quarter. The stock recorded a stellar EPS growth rate (last 3–5 years of actual earnings) of almost 22%.
Neovasc saw a stellar gain of 12.5% over the last three months. The company projects sales growth of 102.88% for the current year.
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DexCom (DXCM) Q1 Loss Narrower than Expected, Revenues Miss
DexCom Inc. (DXCM - Free Report) reported a loss of 49 cents per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 55 cents. However, the figure was wider than the loss of 23 cents reported in the year-ago quarter.
Interestingly, Dexcom posted a positive earnings surprise in the last quarter as well.
Getting back to the quarter, total revenue grew to $142 million, reflecting an increase of 22.4% from $116 million in the year-ago quarter. However, the figure lagged the Zacks Consensus Estimate of $144 million.
Operational Details
DexCom generated a gross margin (as a percentage of revenues) of 66%, compared with 65% for the same quarter in the prior year. Notably, gross margin was slightly below management’s anticipated range for the quarter, thanks to a drop in first-quarter sales.
International business showed continued year-over-year growth in the quarter, generating $26 million in revenues, up 37% on a year-over-year basis. Notably, international business represented 18% of total revenue in the first quarter. Particularly, Germany fueled almost 37% growth outside the U.S. in the quarter.
DexCom, Inc. Price, Consensus and EPS Surprise
DexCom, Inc. Price, Consensus and EPS Surprise | DexCom, Inc. Quote
Research and development (R&D) expenses totaled $48 million in the quarter, compared with $32 million a year ago. The company’s R&D investments include the G6 pivotal study and related submissions with the FDA.
Selling, general and administrative expenses totaled $86 million in the reported quarter, compared with $62 million in the same quarter of 2016. The rise was primarily due to year-over-year increases in head count in customer support organizations, higher marketing expenses and escalating IT costs.
Financial Update
As of Mar 31, 2017, DexCom had $181.1 million in cash, cash equivalents and short-term marketable securities.
Guidance
This Zacks Rank #3 (Hold) company projects global revenues in the band of $710 million to $740 million, reflecting growth of approximately 25% to 30%.
For the full year, DexCom anticipates gross margin at the low end of the 67% to 70% guidance.
Key Picks
Better-ranked stocks in the broader medical sector include Neovasc Inc. , Hologic, Inc. (HOLX - Free Report) and Sunshine Heart Inc . Notably, all the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 33.7%.
Sunshine Heart posted a positive earnings surprise of 58.24% in the last reported quarter. The stock recorded a stellar EPS growth rate (last 3–5 years of actual earnings) of almost 22%.
Neovasc saw a stellar gain of 12.5% over the last three months. The company projects sales growth of 102.88% for the current year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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