), a player in the glucose monitoring market, reported fourth
quarter 2012 adjusted loss per share of 14 cents, better than the
Zacks Consensus Estimate of a loss of 16 cents per share. For
2012, DexCom reported adjusted loss per share of 81 cents better
than the Zacks Consensus Estimate of a loss of 84 cents per
share. Net loss for the quarter dropped 30.3% year over year to
$8.5 million (or loss of 12 cents per share).
Revenues surged 48.7% year over year to $33.3 million in the
fourth quarter, beating the Zacks Consensus Estimate of $29
million. For 2012, revenues rose 30.9% to $99.9 million
surpassing the Zacks Consensus Estimate of $96 million.
Product sales increased almost 51.7% to $31.7 million while
development grant and other revenues improved 6.7% to $1.6
million in the reported quarter.
Margins and Expenses
Gross margin improved to 52.6% in the fourth quarter from
47.8% a year ago. Operating expenses increased 13.1% year over
year to $25.9 million due to higher selling, general and
administrative expenses, which grew 25.5% in the reported
quarter. The company reduced its operating loss year over
DexCom exited the fourth quarter with cash and short-term
marketable securities of $48.7 million, down 40.6% on a
year-over-year basis. Long-term debt (net of current portion)
amounted to $6.8 million, up from zero in the year-ago
DexCom is well placed in the industry that it serves. Given
the burgeoning diabetes population in the U.S., its G4 Platinum
presents considerable market opportunity. Successful
commercialization of G4 in the U.S. could just be the catalyst
that the company needs to gain share in the market it serves.
Increased awareness and acceptance of the need for continuous
glucose monitoring and international expansion should help drive
sales of DexCom's products. The company is eyeing prospects in
the vast markets of India, China and Japan.
In addition to upgrading and enhancing the functions of
existing products, DexCom has also been active on the
collaboration front, through which it is looking to leverage its
technology with its collaborator's product offerings.
Competition in the glucose monitoring market is fierce. DexCom
competes with Roche Diabetes Care, a division of
) and LifeScan under
Johnson & Johnson
) for its Seven Plus offering. Additionally,
) have gained FDA approval for continuous glucose monitoring
We believe that the company's move to buy healthcare IT
company SweetSpot Diabetes Care, may allow it to compete more
effectively through better data management systems.
Despite increasing revenues, DexCom remains a loss making
entity and its efforts are made more difficult by a stringent
regulatory environment. The stock currently holds a Zacks Rank #3
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