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Intuitive Surgical (ISRG) Q2 Earnings & Revenues Top Estimates

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Intuitive Surgical, Inc. (ISRG - Free Report) reported second-quarter 2021 adjusted earnings per share (EPS) of $3.92, which beat the Zacks Consensus Estimate of $3.16 by 24.1%. The bottom line improved significantly on a year-over-year basis.

GAAP EPS in the quarter was $4.25, compared with the year-ago quarter’s figure of 57 cents.

Revenue Details

The Zacks Rank #3 (Hold) company reported revenues of $1.46 billion, which soared 71.8% from the prior-year quarter. The top line outpaced the Zacks Consensus Estimate by 13.9%.

Segment Details

Instruments & Accessories

Revenues at the segment amounted to $796.4 million, reflecting year-over-year improvement of 72.8%. This can be attributed to 68% growth in da Vinci procedure volume.

Systems

In the reported quarter, System revenues soared 68.4% year over year to $439.6 million. In fact, the company shipped 328 da Vinci Surgical Systems in the quarter, compared to 178 systems in the prior-year quarter.

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

Services

Services revenues were $228 million, up 74.9% from the year-ago quarter.

Outside the United States, revenues totaled $458.2 million, up 44.7% on a year-over-year basis.

Outside the United States, Intuitive Surgical placed 115 systems in the second quarter compared with 72 in the prior-year quarter. Of these, 63 were in Europe, 16 in Japan and 19 in China.

Margins

Adjusted gross profit in the reported quarter was $1.05 billion, up 97.4% year over year. As a percentage of revenues, gross margin in the quarter was 71.7%, up 930 basis points (bps).

Adjusted operating income totaled $629.9 million, up 225.9% year over year. As a percentage of revenues, operating margin in the quarter was 43%, up 2030 bps.

Financial Position

The company exited the second quarter with cash, cash equivalents and investments of $7.73 billion, compared with $7.23 billion in the previous quarter.

Total assets were $12.29 billion, compared with $11.54 billion sequentially.

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 second quarter on a solid note. The company displayed strong segmental performance in the quarter under review. It witnessed growth in da Vinci procedure volume in the quarter under review. Expansion in both gross and operating margins is a positive. Overall international sales improved in the quarter.

Per management, the second quarter exhibited both the demand for superior quality minimally invasive procedures along with a return to surgeries that were deferred during the pandemic.

However, intense competition in the global MedTech space remains a concern.

Key Picks

Some better-ranked stocks, which are expected to report earnings soon, are AMN Healthcare Services Inc. (AMN - Free Report) , Catalent, Inc. (CTLT - Free Report) and Align Technology, Inc. (ALGN - Free Report) , each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for AMN Healthcare’s second-quarter 2021 adjusted EPS is currently pegged at $1.47. The consensus mark for second-quarter revenues is pegged at $829.4 million.

The Zacks Consensus Estimate for Catalent’s fourth-quarter fiscal 2021 adjusted EPS is currently pegged at $1.04. The consensus mark for first-quarter revenues stands at $1.13 billion.

The Zacks Consensus Estimate for Align Technology’s second-quarter 2021 adjusted EPS is currently pegged at $2.56. The consensus mark for its revenues stands at $937.5 million.

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