58.9 F
San Diego
Tuesday, Mar 19, 2024
-Advertisement-

DexCom’s Q1 Revenues Fall Short of Projections

Stock is down nearly 10 percent Wednesday for San Diego device maker DexCom Inc. following an earnings report that left some investors unimpressed.

The medical device company actually reported a 22 percent bump to its quarterly revenue compared to the same period last year, bringing in $142.3 million for the quarter. Although improved from Q1 last year, the revenue was below Wall Street’s projection of $144.5 million.

The company’s net loss was $41.7 million, or $0.49 per share, which was actually ahead of what market watchers had predicted.

Still, the revenue hit was enough to send the stock south. Since DexCom isn’t a profitable company and trades at a premium valuation, Wall Street typically places an emphasis on revenue growth above all else.

In an investor call, DexCom’s executive vice president of strategy and corporate development, Steven Pacelli, explained the revenue miss. He attributed the slowdown in sales to the recent ruling by the Centers of Medicare & Medicaid (CMS) to allow insurance reimbursement for DexCom’s continuous glucose monitoring device. Although ultimately the ruling will be a good thing for DexCom’s bottom line, the legal technicalities of the transition are causing a slow start.

“Because of the January CMS ruling, we’re prohibited by law from balance billing our existing cash-pay Medicare eligible patients, which we estimate accounted for approximately $2 million to $3 million in lost sales during the quarter,” Pacelli said. “There is a lot of excitement around the CMS ruling and our sales channel is experiencing a significant amount of noise in the field, which has not yet translated into revenue.”

At close of market on Wednesday, DexCom (Nasdaq: DXCM) was trading at $73.91 per share. The company’s market cap sits at $6.55 billion.

-Advertisement-

Featured Articles

Oberon Eyes Europe for Renewable DME

Leaders of Influence in Law 2024

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-