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What's in Store for Intuitive Surgical (ISRG) in Q3 Earnings?

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Intuitive Surgical, Inc. ISRG is expected to release third-quarter 2019 results on Oct 17, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 14.04%. Further, it has an average four-quarter positive surprise of 4.13%.

Which Way Are Estimates Treading?

Currently, the Zacks Consensus Estimate for third-quarter revenues is pegged at $1.06 billion, suggesting growth of 14.9% from the year-ago reported number. The consensus estimate for earnings per share is pegged at $2.96 per share, indicating an improvement of 4.6% from the year-ago reported figure.

Instruments & Accessories: A Key Catalyst

The Instruments & Accessories segment is anticipated to see a solid third quarter. Notably, the segment (contributing 52.6% to total revenues) performed impressively in the last reported quarter as well, registering 21.5% growth year over year. Anticipated increase in da Vince procedure volumes and customer buying patterns are likely to get reflected in the segment’s revenues in the to-be-reported quarter.

Further, the flagship — da Vinci surgical system — continues to be a revenue driver for the segment. In fact, we anticipate the company’s da Vinci SP surgical system to benefit the company’s performance in the soon-to-be-reported quarter.

Reflective of these, the Zacks Consensus Estimate for Instruments & Accessories’ third-quarter revenues is pegged at $574 million, suggesting growth of 18.1% from the year-ago quarter's reported figure.

Intuitive Surgical, Inc. Price and EPS Surprise


Intuitive Surgical, Inc. Price and EPS Surprise

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

Other Factors at Play

Revenues from other two segments — Systems and Services — are expected to have positively impacted the third quarter courtesy of steady progress in the imaging and reality programs. In the last reported quarter, Systems contributed 31.3% to net sales while Services accounted for 16.1%.

For the quarter to be reported, the Zacks Consensus Estimate for Services stands at $179 million, indicating an improvement 11.9% from the year-earlier quarter's reported figure. The same for Systems is pegged at $309 million, suggesting growth of 12.4% from the year-ago quarter’s reported number.

The company is likely to have witnessed growth in da Vinci procedures in the to-be-reported quarter on the back of probable procedure growth in the United States and outside of U.S. markets. Moreover, general surgery in the United States and urology worldwide might contribute to the anticipated growth. In fact, Intuitive Surgical now forecasts 2019 procedure growth in the range of 16% to 17%, compared with the previous 15% to 17%.

Moreover, the company’s acquisition of Schölly Fiberoptic’s robotic endoscope business in July is likely to have improved da Vinci Surgical system through the addition of important aspects of da Vinci’s visualization system. Notably, the buyout is anticipated to have strengthened Intuitive Surgical’s supply chain and enhanced manufacturing capacity for imaging products. Thereby, the positive impacts of the acquisition are likely to reflect in the company’s third-quarter results.

However, cutthroat competition in the MedTech space continued to remain a headwind and might have weighed on its margins, which have been contracting over the last couple of quarters.

Earnings Whispers

According to the Zacks model, a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. However, this is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Intuitive Surgical has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Intuitive Surgical carries a Zacks Rank #3.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Edward Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank #3.

AmerisourceBergen Corporation ABC has an Earnings ESP of +0.55% and a Zacks Rank #3.

Cardinal Health, Inc. CAH has an Earnings ESP of +1.50% and a Zacks Rank #3.

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