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Intuitive Surgical (ISRG - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of $1.14, which missed the Zacks Consensus Estimate of $1.16 per share by 1.8%. The bottom line also declined 12.3% from the year-ago quarter.
GAAP EPS in the quarter was 85 cents, compared with the year-ago quarter’s figure of $1.42 per share.
Revenue Details
This Zacks Rank #3 (Hold) company reported revenues of $1.52 billion, which climbed 4% from the prior-year quarter. Growth in da Vinci procedure volume contributed to the improvement. However, the top line missed the Zacks Consensus Estimate by 2.6%.
Segment Details
Instruments & Accessories
Revenues at the segment totaled $895.3 million, reflecting a year-over-year improvement of 12.4%. This can be attributed to 14% da Vinci procedure volume growth. This was partially offset by foreign currency impacts. The resurgence in COVID-19 infections hurt da Vinci procedure volumes during the second quarter. The company expects the adverse impact on procedure volumes to likely continue for the rest of the year.
Systems
In the reported quarter, System revenues declined 14.7% year over year to $375.1 million. The company shipped 279 da Vinci Surgical Systems in the quarter, compared with 328 systems in the prior-year quarter.
Services
Services revenues were $251.7 million, up 10.4% from the year-ago quarter.
Outside the United States, Intuitive Surgical placed 129 systems in the second quarter compared with 115 in the prior-year quarter. Of these, 78 were in Europe, 18 in Japan and 15 in China.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Adjusted gross profit in the reported quarter was $1.05 billion, up 0.3% year over year. As a percentage of revenues, the gross margin in the quarter was 69.2%, down 40 basis points (bps) from the previous quarter.
Selling, general and administrative expenses amounted to $418.4 million, up 19.5% from the prior-year quarter. Research and development expenses totaled $207.3 million, up 27.7% on a year-over-year basis.
Adjusted operating income totaled $531.2 million, down 15.3% year over year. As a percentage of revenues, the operating margin in the quarter was 34.9%, down 90 bps quarter over quarter.
Financial Position
The company exited the second quarter with cash, cash equivalents and investments of $8.18 billion, compared with $8.40 billion in the previous quarter.
Total assets were $13.71 billion, compared with $13.68 billion sequentially.
Wrapping Up
Intuitive Surgical ended the second quarter on a weak note, wherein both earnings and revenues missed the consensus mark. However, the company displayed strong segmental performance in the quarter under review. It witnessed growth in da Vinci procedure volume in the second quarter. Overall international sales improved in the second quarter.
The contraction in both gross and operating margins is disappointing. Also, intense competition in the global MedTech space remains a concern.
Glaukos’ loss per share estimates have improved from $1.94 to $1.78 for 2022 in the past 60 days. GKOS has gained 13.8% so far this year.
Glaukos delivered an earnings surprise of 28.68%, on average, in the last four quarters.
Estimates for ShockWave Medical have moved north from earnings per share of $1.85 to $2.02 for 2022 in the past 60 days. SWAV has gained 17.8% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
STERIS’ earnings per share estimates have improved from $8.70 to $8.71 for 2022 in the past 60 days. STE has declined 9.7% so far this year.
STERIS delivered an earnings surprise of 9.2%, on average, in the last four quarters.
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Intuitive Surgical (ISRG) Q2 Earnings Miss, Procedures Recover
Intuitive Surgical (ISRG - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of $1.14, which missed the Zacks Consensus Estimate of $1.16 per share by 1.8%. The bottom line also declined 12.3% from the year-ago quarter.
GAAP EPS in the quarter was 85 cents, compared with the year-ago quarter’s figure of $1.42 per share.
Revenue Details
This Zacks Rank #3 (Hold) company reported revenues of $1.52 billion, which climbed 4% from the prior-year quarter. Growth in da Vinci procedure volume contributed to the improvement. However, the top line missed the Zacks Consensus Estimate by 2.6%.
Segment Details
Instruments & Accessories
Revenues at the segment totaled $895.3 million, reflecting a year-over-year improvement of 12.4%. This can be attributed to 14% da Vinci procedure volume growth. This was partially offset by foreign currency impacts. The resurgence in COVID-19 infections hurt da Vinci procedure volumes during the second quarter. The company expects the adverse impact on procedure volumes to likely continue for the rest of the year.
Systems
In the reported quarter, System revenues declined 14.7% year over year to $375.1 million. The company shipped 279 da Vinci Surgical Systems in the quarter, compared with 328 systems in the prior-year quarter.
Services
Services revenues were $251.7 million, up 10.4% from the year-ago quarter.
Outside the United States, Intuitive Surgical placed 129 systems in the second quarter compared with 115 in the prior-year quarter. Of these, 78 were in Europe, 18 in Japan and 15 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 $1.05 billion, up 0.3% year over year. As a percentage of revenues, the gross margin in the quarter was 69.2%, down 40 basis points (bps) from the previous quarter.
Selling, general and administrative expenses amounted to $418.4 million, up 19.5% from the prior-year quarter. Research and development expenses totaled $207.3 million, up 27.7% on a year-over-year basis.
Adjusted operating income totaled $531.2 million, down 15.3% year over year. As a percentage of revenues, the operating margin in the quarter was 34.9%, down 90 bps quarter over quarter.
Financial Position
The company exited the second quarter with cash, cash equivalents and investments of $8.18 billion, compared with $8.40 billion in the previous quarter.
Total assets were $13.71 billion, compared with $13.68 billion sequentially.
Wrapping Up
Intuitive Surgical ended the second quarter on a weak note, wherein both earnings and revenues missed the consensus mark. However, the company displayed strong segmental performance in the quarter under review. It witnessed growth in da Vinci procedure volume in the second quarter. Overall international sales improved in the second quarter.
The contraction in both gross and operating margins is disappointing. Also, intense competition in the global MedTech space remains a concern.
Stocks to Consider
Some better-ranked stocks from the medical sector include Glaukos (GKOS - Free Report) , ShockWave Medical (SWAV - Free Report) and STERIS (STE - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos’ loss per share estimates have improved from $1.94 to $1.78 for 2022 in the past 60 days. GKOS has gained 13.8% so far this year.
Glaukos delivered an earnings surprise of 28.68%, on average, in the last four quarters.
Estimates for ShockWave Medical have moved north from earnings per share of $1.85 to $2.02 for 2022 in the past 60 days. SWAV has gained 17.8% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
STERIS’ earnings per share estimates have improved from $8.70 to $8.71 for 2022 in the past 60 days. STE has declined 9.7% so far this year.
STERIS delivered an earnings surprise of 9.2%, on average, in the last four quarters.