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Intuitive Surgical (ISRG) Q2 Earnings Top Estimates, Down Y/Y
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Intuitive Surgical, Inc. (ISRG - Free Report) reported second-quarter 2020 adjusted earnings per share (EPS) of $1.11, which beat the Zacks Consensus Estimate of 34 cents. However, adjusted EPS plunged 65.8% year over year.
The Zacks Rank #4 (Sell) company reported revenues of $852.1 million, which declined 22.5% from the prior-year quarter. Nonetheless, the figure outpaced the Zacks Consensus Estimate of $675.2 million.
Segment Details
Instruments & Accessories
Revenues at the segment came in at $460.8 million, reflecting a year-over-year decline of 20.3%. This can be attributed to decrease of 19% in da Vinci procedure volume primarily due to the substantial disruption caused by the COVID-19 pandemic.
Systems
In the reported quarter, System revenues fell 24.1% year over year to $261 million. Notably, the company shipped 178 da Vinci Surgical Systems in the quarter, down 35% from the prior-year quarter.
Services
Services revenues came in at $130.3 million, down 26.2% from the year-ago quarter.
Outside the United States, revenues totaled $316.6 million, up 1% on a year-over-year basis.
Outside the United States, Intuitive Surgical placed 72 systems in the second quarter compared with 80 in the prior-year quarter. Of these, 18 were in Europe, 18 in Japan and 21 in China.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Adjusted gross profit in the reported quarter was $531.9 million, down 32.1% year over year. As a percentage of revenues, gross margin in the quarter was 59%, down 1010 basis points (bps).
Adjusted operating income totaled $193.3.3 million, down 57.5% year over year. As a percentage of revenues, operating margin in the quarter was 9.5%, down 2320 bps.
Outlook
Due to the 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. Hence, the company has not issued any guidance for 2020.
Wrapping Up
Intuitive Surgical ended the second quarter on a solid note. However, the company witnessed decline in procedures and systems placements due to the substantial disruption caused by the pandemic. This, in turn, resulted in revenue decline in the quarter under review. The flagship da Vinci procedures experienced significant deterioration in the quarter. The company witnessed weak performance across its segments in the quarter under review.
Meanwhile, the company witnessed contraction in gross and operating margins in the quarter. Intense competition in the global MedTech space remains a concern.
On the bright side, in the quarter under review, the company unveiled its Extended Use Program that represents some of its higher volume instruments, which exclude stapling, monopolar and advanced energy instruments that can be utilized across numerous da Vinci surgeries. Under this program, the company intends to launch select Xi/X instruments having 12 to 18 uses in comparison to the current 10 use instruments.
Also, overall international sales improved in the quarter.
The Zacks Consensus Estimate for ViewRay’s second-quarter 2020 bottom line is pegged at a loss of 16 cents per share, indicating 50% narrower loss than the year-ago reported quarter figure.
The Zacks Consensus Estimate for Opko Health’s second-quarter 2020 bottom line stands at a loss of 7 cents per share, suggesting an improvement of 30% from the year-ago period. The same for revenues is pegged at $234.6 million, indicating growth of 3.6% from the year-earlier reported figure.
The Zacks Consensus Estimate for ResMed’s fourth-quarter fiscal 2020 revenues is pegged at $710.9 million, suggesting growth of 0.9% from the year-earlier reported figure. The same for adjusted earnings per share stands at 99 cents, indicating an improvement of 4.2% from the year-ago quarter.
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Intuitive Surgical (ISRG) Q2 Earnings Top Estimates, Down Y/Y
Intuitive Surgical, Inc. (ISRG - Free Report) reported second-quarter 2020 adjusted earnings per share (EPS) of $1.11, which beat the Zacks Consensus Estimate of 34 cents. However, adjusted EPS plunged 65.8% year over year.
The Zacks Rank #4 (Sell) company reported revenues of $852.1 million, which declined 22.5% from the prior-year quarter. Nonetheless, the figure outpaced the Zacks Consensus Estimate of $675.2 million.
Segment Details
Instruments & Accessories
Revenues at the segment came in at $460.8 million, reflecting a year-over-year decline of 20.3%. This can be attributed to decrease of 19% in da Vinci procedure volume primarily due to the substantial disruption caused by the COVID-19 pandemic.
Systems
In the reported quarter, System revenues fell 24.1% year over year to $261 million. Notably, the company shipped 178 da Vinci Surgical Systems in the quarter, down 35% from the prior-year quarter.
Services
Services revenues came in at $130.3 million, down 26.2% from the year-ago quarter.
Outside the United States, revenues totaled $316.6 million, up 1% on a year-over-year basis.
Outside the United States, Intuitive Surgical placed 72 systems in the second quarter compared with 80 in the prior-year quarter. Of these, 18 were in Europe, 18 in Japan and 21 in China.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Intuitive Surgical, Inc. price-consensus-eps-surprise-chart | Intuitive Surgical, Inc. Quote
Margins
Adjusted gross profit in the reported quarter was $531.9 million, down 32.1% year over year. As a percentage of revenues, gross margin in the quarter was 59%, down 1010 basis points (bps).
Adjusted operating income totaled $193.3.3 million, down 57.5% year over year. As a percentage of revenues, operating margin in the quarter was 9.5%, down 2320 bps.
Outlook
Due to the 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. Hence, the company has not issued any guidance for 2020.
Wrapping Up
Intuitive Surgical ended the second quarter on a solid note. However, the company witnessed decline in procedures and systems placements due to the substantial disruption caused by the pandemic. This, in turn, resulted in revenue decline in the quarter under review. The flagship da Vinci procedures experienced significant deterioration in the quarter. The company witnessed weak performance across its segments in the quarter under review.
Meanwhile, the company witnessed contraction in gross and operating margins in the quarter. Intense competition in the global MedTech space remains a concern.
On the bright side, in the quarter under review, the company unveiled its Extended Use Program that represents some of its higher volume instruments, which exclude stapling, monopolar and advanced energy instruments that can be utilized across numerous da Vinci surgeries. Under this program, the company intends to launch select Xi/X instruments having 12 to 18 uses in comparison to the current 10 use instruments.
Also, overall international sales improved in the quarter.
Key Picks
Some better-ranked stocks in the broader medical space are ViewRay, Inc. , Opko Health (OPK - Free Report) and ResMed Inc. (RMD - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ViewRay’s second-quarter 2020 bottom line is pegged at a loss of 16 cents per share, indicating 50% narrower loss than the year-ago reported quarter figure.
The Zacks Consensus Estimate for Opko Health’s second-quarter 2020 bottom line stands at a loss of 7 cents per share, suggesting an improvement of 30% from the year-ago period. The same for revenues is pegged at $234.6 million, indicating growth of 3.6% from the year-earlier reported figure.
The Zacks Consensus Estimate for ResMed’s fourth-quarter fiscal 2020 revenues is pegged at $710.9 million, suggesting growth of 0.9% from the year-earlier reported figure. The same for adjusted earnings per share stands at 99 cents, indicating an improvement of 4.2% from the year-ago quarter.
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