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Intuitive Surgical (ISRG) Q4 Earnings Beat Estimates, Up Y/Y

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Intuitive Surgical, Inc. (ISRG - Free Report) reported fourth-quarter 2020 adjusted earnings per share (EPS) of $3.58, which beat the Zacks Consensus Estimate of $3.10 by 15.5%. Moreover, the bottom line improved 2.9% year over year.

For the full-year 2020, the company reported adjusted EPS of $10.16, which declined 20.4% from 2019 but surpassed the consensus mark by 4.9%.

Revenue Details

The Zacks Rank #4 (Sell) company reported revenues of $1.33 billion, which rose 4% from the prior-year quarter. The top line also outpaced the Zacks Consensus Estimate of $1.24 billion by 7.3%.

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

Intuitive Surgical, Inc. price-consensus-eps-surprise-chart | Intuitive Surgical, Inc. Quote

For the full-year 2020, the company reported revenues of $4.36 billion, down 2.7% from 2019. However, the figure beat the Zacks Consensus Estimate by 2.3%.

Segment Details

Instruments & Accessories

Revenues at the segment amounted to $746.9 million, reflecting year-over-year improvement of 11.3%. This can be attributed to 6% growth in da Vinci procedure volume and stocking orders related to the company’s introduction of Extended Use Instruments.

Systems

In the reported quarter, System revenues slumped 11.9% year over year to $267.8 million. In fact, the company shipped 326 da Vinci Surgical Systems in the quarter, compared to 336 systems in the prior-year quarter.

Services

Services revenues were $215.4 million, up 13.2% from the year-ago quarter.

Outside the United States, Intuitive Surgical placed 130 systems in the fourth quarter compared with 140 in the prior-year quarter. Of these, 54 were in Europe, 22 in Japan and 13 in China.

Margins

Adjusted gross profit in the reported quarter was $926.8 million, up 0.5% year over year. As a percentage of revenues, gross margin in the quarter was 67.4%, down 270 basis points (bps).

Adjusted operating income totaled $534.6 million, up 5.7% year over year. As a percentage of revenues, operating margin in the quarter was 31.3%, up 20 bps.

Outlook

Due to persistent uncertainty surrounding the extent and duration of the pandemic, and the timing of global recovery and economic normalization; the company cannot ascertain the future impact on its operations and financial performance during this time. Consequently, the company has refrained from issuing any guidance for 2021.

Wrapping Up

Intuitive Surgical ended the fourth quarter on a solid note. Moreover, the company witnessed growth in da Vinci procedure volume in the quarter under review. Expansion in operating margin is a positive.

However, the company witnessed weak performance in its Systems segment in the quarter under review. It also witnessed contraction in gross margin in the fourth quarter. Further, intense competition in the global MedTech space remains a concern.

Key Picks

Some better-ranked stocks, which are expected to report earnings soon, are Hologic, Inc. (HOLX - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and NextGen Healthcare, Inc. .

The Zacks Consensus Estimate for Hologic's first-quarter fiscal 2021 adjusted EPS is pegged at $2.14. The consensus estimate for revenues stands at $1.38 billion. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IDEXX currently carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for fourth-quarter 2020 adjusted EPS is currently pegged at $1.43. The consensus estimate for fourth-quarter revenues is pegged at $677.5 million.

The Zacks Consensus Estimate for NextGen's third-quarter fiscal 2021 adjusted EPS is currently pegged at 25 cents. The consensus estimate for revenues stands at $140.9 million. Presently, the company carries a Zacks Rank of 2.

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