), a player in the glucose monitoring market, reported
first-quarter 2012 loss per share of 21 cents, higher than the
Zacks Consensus Estimate of a loss of 19 cents per share. Net loss
for the quarter increased 18.7% year over year to $14.1 million (21
cents per share).
Sales increased sharply 41.8% year over year to $20.1 million in
the first quarter, narrowly beating the Zacks Consensus Estimate of
Product sales jumped 42% to $18.6 million while development
grant and other revenues were up 42.7% to $1.5 million in the
Margins and Expenses
Gross margin picked up to 46.7% in the first quarter from 36.1%
a year ago. Cost of sales moved up 18.2% year over year to $10.7
million mostly on account of higher cost of product sales.
Operating expenses increased 45.9% year over year to $24.8 million
on account of higher R&D spending and selling, general and
administrative expenses, which grew 55% and 40.6%, respectively, in
the reported quarter.
DexCom exited the quarter with cash and short-term marketable
securities of $70.2 million, down 14.3% on a sequential basis.
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 a stricter 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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