Categories Earnings

Intuitive Surgical profit soars 59% on da Vinci procedures demand

Intuitive Surgical (ISRG), the creator of the da Vinci robotic-assisted surgical system, reported a first-quarter profit that exceeded market consensus. The company’s flagship da Vinci surgical system continues to be a revenue driver for the instruments and accessories segment. Shares of Intuitive Surgical inched 6.10% up after the market close on Tuesday.

With total revenue jumping 25% to about $858 million, the instruments maker saw its earnings for the quarter soar 59% higher to $288 million or $2.44 per share. Foreign currency changes contributed about three percentage points to the revenue growth. A climb in the worldwide da Vinci procedures helped the total revenue spurt. Adjusted earnings per share climbed by 43%.

Global da Vinci procedures grew about 15% helped by growth in U.S. general surgery procedures and worldwide urologic procedures. The company shipped 185 da Vinci surgical systems during the quarter, up from 133 last year. The 15% growth in da Vinci procedure volume drove the instrument and accessory revenue higher by about 21%.

Intuitive Surgical Q1 2018 Earnings Infographic
Intuitive Surgical Q1 2018 Earnings Infographic

On recommendation trends, eleven of the eighteen analysts are expecting a “buy” or “strong buy” rating and six are predicting a “hold” rating. On the growth estimates front, the market is seeing an 8.30% growth for the current year and a 14% jump for the next year. On the shareholding front, 1.06% of shares are held by insiders, and institutions hold 91.42%.

With more than 4,400 installed systems, Intuitive Surgical dominates the robotic surgical systems market. The company invests more than 10% of revenue into research and development as known from its growth of 30% during the quarter. The company can remain on the top of the market till its R&D investments and financial strength remain strong.

On the competition front, Intuitive Surgical will face a bigger challenge from Medtronic (MDT), which intends to launch later this year its own robotic surgical system. Medtronic will release their earnings results for the fourth quarter of 2018 on May 24. Investors are expecting Medtronic to talk more about the launch of a robotic surgical system at their earnings conference.

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