Intuitive’s Q3 – The Numbers that Matter

• Posted by Danny
• on October 18th, 2012

The stock was a yo-yo after the bell on Tuesday, but the bulls prevailed after the dust settled.

 

Intuitive Surgical ($ISRG) had a slim beat for its Q3 on Tuesday, reporting EPS of $3.54 (ex-tax benefit) and revenue of $538 mil. Some liked the report, some didn’t. After the noise died down, here’s what we found most important:

• Revenue +20% y/y
• Net income +19% y/y (ex-benefit)
• Instruments & Accessories revenue +24% y/y
• Systems revenue +17% y/y
• Service revenue +22% y/y
• Sold 22 more da Vinci Surgery Systems than last yr
• Procedure growth +22% y/y
• Gross margin of 72.5% vs 72.9% last yr
• Ended Q with $2.7B in cash & equiv

So, not a whole lot to complain about. The only negatives were that procedure growth came in lighter than expected due in part to, yes you guessed it, Europe! …and a slowdown in prostate surgeries in the U.S. Thus, this had a slight impact on their full year guidance:

• Procedure growth of 24% vs 25-27% prior
• Revenue growth of 21.5-23% vs 20-23% prior

Again, not much to whine about, especially with full year revs still in range…but if Europe continues to freak out then anything’s possible I guess. Japan was a pleasant surprise though, where 16 da Vincis were sold in Q3, compared to just 13 in Europe.

Ranked 15th in the BeanScreen this month, ISRG’s overall fundies remain strong in our view after crunching the new numbers. We started a position 3 months ago at $500, and will definitely be holding for now. Sub 500 appears to be the sweet spot for us to add.

 

sources:  Intuitive Surgical Announces Third Quarter Earnings – Y! Finance

Intuitive Surgical 3Q income jumps; shares slide – AP

Intuitive Beats Estimates in 3Q – Zacks

Intuitive Surgical procedure growth disappoints – Reuters

Estimize

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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