), a player in the glucose monitoring market, reported
second-quarter 2012 loss per share of 21 cents, higher than the
Zacks Consensus Estimate of a loss of 20 cents per share and the
year-ago loss of 11 cents a share. Net loss for the quarter jumped
99.4% year over year to $14.7 million (21 cents per share).
Sales grew 9.4% year over year to $23.5 million in the first
quarter, beating the Zacks Consensus Estimate of $22 million.
Product sales increased 41.8% to $21.5 million while development
grant and other revenues were down 69.1% to $1.9 million in the
Margins and Expenses
Gross margin declined to 47.9% in the second quarter from 55.4%
a year ago. Cost of sales increased 27.9% year over year to $12.2
million, mostly on account of higher cost of product sales.
Operating expenses moved up 34.4% year over year to $25.9 million
due to higher R&D spending and selling, general and
administrative expenses, which grew 49.6% and 25.7%, respectively,
in the reported quarter.
DexCom ended the quarter with cash and short-term marketable
securities of $105 million, down 41.7% on a year over year
We believe DexCom is poised to gain a major share of the glucose
monitoring market driven by sustained product development
initiatives, collaborations, favorable reimbursement coverage and
increased need for continuous glucose monitoring.
However, we note that competition in the glucose monitoring
market is intense and DexCom faces stiff challenges from much
larger players such as
Johnson & Johnson
). Moreover, the company has incurred losses since inception and is
exposed to an increasingly strict regulatory environment. Our
Neutral recommendation is supported by a short-term Zacks #3 Rank
ABBOTT LABS (ABT): Free Stock Analysis Report
DEXCOM INC (DXCM): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis
MEDTRONIC (MDT): Free Stock Analysis Report
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