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Intuitive Surgical (ISRG) Beats on Q2 Earnings & Revenues
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Intuitive Surgical, Inc (ISRG - Free Report) reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted Earnings improved 38% year over year.
Revenues totaled $909.3 million, up 19.8% from the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $870 million. The upside was backed by higher worldwide da Vinci procedures led by growth in U.S. general surgery procedures and global urologic procedures.
Meanwhile, in the last three months, the stock has gained 16.4% against the industry’s decline of 1.6%.
Revenues came in at $476.1 million, which reflects year-over-year increase of 19.7%. The uptick in instrument accessory revenue was primarily driven by procedure growth and customer buying pattern.
Systems
In the reported quarter, system revenues increased 25.5% year over year to $277.4 million. Notably, 220 da Vinci Surgical systems were shipped by the company, up 32.5% year over year.
In the quarter under review, shipments included 44 systems under operating lease arrangements, compared with 27 in the year-ago quarter.
Services
Services revenues came in at $155.8, up 11.4% from the year-ago quarter.
International Sales Up
Outside the United States, revenues totaled $265 million, up 28% on a year-over-year basis.
The upside can be attributed to an increase in systems revenue of $25 million and higher instruments and accessories revenues of $27 million.
Outside of the United States, Intuitive Surgical placed 82 systems in the reported quarter compared with 63 in the second quarter of 2017. This included 39 system replacements in Europe, 13 in Japan and nine in Australia. 30 of the total systems placed in the second quarter were X systems.
Margins
Gross profit in the reported quarter was $632.3 million, down 19.3% year over year. As a percentage of revenues, gross margin contracted 40 basis points (bps) to 69.5% in the quarter. The downside primarily indicates lower system ASPs and unfavorable revenue mix.
Operating income in the second quarter was $277.4 million, up6.7% year over year. As a percentage of revenues, operating margin contracted 380 bps in the quarter.
Outlook
For 2018, Intuitive Surgical continues to expect adjusted gross profit margin in the range of 70-71.5% of net revenues. Management at Intuitive Surgical expects non-cash stock compensation expenses between $245 million and $255 million.
Intuitive Surgical forecasts 2018 procedure growth in the range of 14.5-16.5%, up from the previous band of12-15%.
Non-cash stock compensation expenses are expected to between $245 million and $255 million in 2018.
Intuitive Surgical forecasts other income, which includes mostly interest income, between $70 million and $75 million, up from the previous guidance of $55 million and$60 million.
Our Take
Intuitive Surgical exited the second quarter of 2018 on a favorable note, beating the Zacks Consensus Estimate on both the counts. The company’s flagship da Vinci procedures recorded solid growth that looks promising for the quarters ahead. The company also saw solid expansion outside the United States. A suite of regulatory approvals for the Vessel Sealer Extend — the da Vinci SP Surgical System — and the Sure Form 60 buoys optimism. Solid growth in prostatectomy procedure volumes lent Intuitive Surgical a competitive edge in the broader prostate surgery market.
However, the company expects U.S. sales to decline in the quarters ahead, which raises concern. Further, looming foreign exchange volatility also adds to the woes. Intense competition in niche space as well as long sale and purchase order cycles of da Vinci unit has been currently plaguing the company
Zacks Rank & Key Picks
Intuitive Surgical has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Genomic Health , Align Technology, Inc (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Genomic Health is expected to release second-quarter fiscal 2018 results on Aug 7. The Zacks Consensus Estimate for the quarter’s adjusted EPS is pegged at 7 cents. The same for revenues is pinned at $91.9 million. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for the period’s adjusted EPS is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1.
Integer Holdings is slated to release second-quarter 2018 results on Apr 25. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is $381.8 million. The stock sports a Zacks Rank #1.
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Intuitive Surgical (ISRG) Beats on Q2 Earnings & Revenues
Intuitive Surgical, Inc (ISRG - Free Report) reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted Earnings improved 38% year over year.
Revenues totaled $909.3 million, up 19.8% from the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $870 million. The upside was backed by higher worldwide da Vinci procedures led by growth in U.S. general surgery procedures and global urologic procedures.
Meanwhile, in the last three months, the stock has gained 16.4% against the industry’s decline of 1.6%.
Intuitive Surgical, Inc. Price and Consensus
Intuitive Surgical, Inc. Price and Consensus | Intuitive Surgical, Inc. Quote
Segment Details
Instruments & Accessories
Revenues came in at $476.1 million, which reflects year-over-year increase of 19.7%. The uptick in instrument accessory revenue was primarily driven by procedure growth and customer buying pattern.
Systems
In the reported quarter, system revenues increased 25.5% year over year to $277.4 million. Notably, 220 da Vinci Surgical systems were shipped by the company, up 32.5% year over year.
In the quarter under review, shipments included 44 systems under operating lease arrangements, compared with 27 in the year-ago quarter.
Services
Services revenues came in at $155.8, up 11.4% from the year-ago quarter.
International Sales Up
Outside the United States, revenues totaled $265 million, up 28% on a year-over-year basis.
The upside can be attributed to an increase in systems revenue of $25 million and higher instruments and accessories revenues of $27 million.
Outside of the United States, Intuitive Surgical placed 82 systems in the reported quarter compared with 63 in the second quarter of 2017. This included 39 system replacements in Europe, 13 in Japan and nine in Australia. 30 of the total systems placed in the second quarter were X systems.
Margins
Gross profit in the reported quarter was $632.3 million, down 19.3% year over year. As a percentage of revenues, gross margin contracted 40 basis points (bps) to 69.5% in the quarter. The downside primarily indicates lower system ASPs and unfavorable revenue mix.
Operating income in the second quarter was $277.4 million, up6.7% year over year. As a percentage of revenues, operating margin contracted 380 bps in the quarter.
Outlook
For 2018, Intuitive Surgical continues to expect adjusted gross profit margin in the range of 70-71.5% of net revenues. Management at Intuitive Surgical expects non-cash stock compensation expenses between $245 million and $255 million.
Intuitive Surgical forecasts 2018 procedure growth in the range of 14.5-16.5%, up from the previous band of12-15%.
Non-cash stock compensation expenses are expected to between $245 million and $255 million in 2018.
Intuitive Surgical forecasts other income, which includes mostly interest income, between $70 million and $75 million, up from the previous guidance of $55 million and$60 million.
Our Take
Intuitive Surgical exited the second quarter of 2018 on a favorable note, beating the Zacks Consensus Estimate on both the counts. The company’s flagship da Vinci procedures recorded solid growth that looks promising for the quarters ahead. The company also saw solid expansion outside the United States. A suite of regulatory approvals for the Vessel Sealer Extend — the da Vinci SP Surgical System — and the Sure Form 60 buoys optimism. Solid growth in prostatectomy procedure volumes lent Intuitive Surgical a competitive edge in the broader prostate surgery market.
However, the company expects U.S. sales to decline in the quarters ahead, which raises concern. Further, looming foreign exchange volatility also adds to the woes. Intense competition in niche space as well as long sale and purchase order cycles of da Vinci unit has been currently plaguing the company
Zacks Rank & Key Picks
Intuitive Surgical has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Genomic Health , Align Technology, Inc (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Genomic Health is expected to release second-quarter fiscal 2018 results on Aug 7. The Zacks Consensus Estimate for the quarter’s adjusted EPS is pegged at 7 cents. The same for revenues is pinned at $91.9 million. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for the period’s adjusted EPS is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1.
Integer Holdings is slated to release second-quarter 2018 results on Apr 25. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is $381.8 million. The stock sports a Zacks Rank #1.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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