When earnings aren’t earnings
Late yesterday Insulet (NASDAQ:PODD) announced that there earnings call originally scheduled for today would be delayed. According to a company issued press release; “– Insulet Corporation (NASDAQ: PODD), the leader in tubeless insulin pump technology with its OmniPod® Insulin Management System, today announced preliminary revenue results for the three months ended June 30, 2015. The Company also announced that it will postpone the full release of its second quarter financial results and conference call from Thursday, July 30, as originally scheduled.”
The release then went onto state;
“Preliminary second quarter revenue results:
- Total revenue of $75.6 million exceeded the Company’s guidance of $67 to $70 million.
- U.S. OmniPod revenue of $44.7 million, with approximately 20% year-over-year growth in U.S. OmniPod new patient starts.
- International OmniPod revenue of $7.7 million.
- Drug Delivery revenue of $7.5 million.
- Neighborhood Diabetes revenue of $15.7 million.”
While these “preliminary” results seem impressive in an ominous sign the release also contained the following; “Insulet’s second quarter 2015 financial results are preliminary and subject to adjustment as the Company completes a review it initiated related to certain revenue recognized in 2014 with respect to certain 2014 transactions.” Now it is not unusual for a company to make statements like that however based on Insulet’s history Diabetic Investor believes these “preliminary” results will be adjusted and not necessarily for the better.
Diabetic Investor would not go as far and state the company is playing fast and loose with the numbers. Nor would we imply that something nefarious is going on. However that queasy feeling in our stomach isn’t last night’s dinner getting back at us. What’s the old saying if it walks like a duck, squawks like a duck well then it’s a duck.
Based on early trading it appears the street is giving Insulet the benefit of the doubt that these “preliminary” results are for real. Yes it is possible they are and the company is finally beginning to turn things around. However Diabetic Investor prefers to see the ACTUAL results after adjustments have been made. Should they turn out to be as stated great, yet should there be any significant changes watch out.
As we have stated previously the dynamics of insulin pump market aren’t great and like it or not Insulet is in the insulin pump business. They may want to be a drug delivery company and want out of this wacky world, the central fact remains they cannot make this transition without first fixing the insulin pump business. If and this is a huge IF, these “preliminary” results hold true than we have something to talk about. However should these “preliminary” results not hold true we’ll also have something to talk about just not anything good.
Time will tell the real story. Let’s hope for the sake of Insulet stakeholders that they are not being premature with their enthusiasm. As Momma Kliff used to say there is nothing good about being premature. Smart woman Momma Kliff.