Intuitive Surgical, Inc. (ISRG Quick QuoteISRG - Free Report) reported adjusted earnings per share (EPS) of $3.48 in the fourth quarter of 2019, beating the Zacks Consensus Estimate of $3.26. Adjusted EPS improved 17.6% year over year.

 

The Zacks Rank #1 (Strong Buy) company recorded revenues of $1.28 billion, which improved 22.1% from the prior-year quarter. The figure also outpaced the Zacks Consensus Estimate of $1.23 billion.

 

 

Intuitive Surgical’s 2019 revenues totaled $4.48 billion, beating the Zacks Consensus Estimate of $4.44 billion. The figure improved 20.3% from 2018.

 

Adjusted EPS was $12.76, surpassing the consensus mark of $12.57 and rising 16.1% year over year.

 

The company’s Instruments & Accessories sales were $2.41 billion (53.8% of net revenues), Systems revenues were $1.35 billion (30%) and Services revenues grossed $724.2 million (16.2%).

 

 

 

Revenues at the segment came in at $671.2 million, reflecting a year-over-year increase of 24.5% on 19% growth in da Vinci procedure volumes.

 

 

In the reported quarter, System revenues increased 22.2% year over year to $416.2 million. Notably, the company shipped 336 da Vinci Surgical Systems in the quarter.

 

 

Services revenues came in at $190.3 million, up 14.2% from the year-ago quarter.

 

Outside the United States, revenues totaled $422 million, up 37% on a year-over-year basis. The improvement can be attributed to higher instruments and accessory revenues, driven by procedure growth and favorable customer buying patterns.

 

Outside the United States, Intuitive Surgical placed 140 systems in the fourth quarter compared with 115 in the fourth quarter of 2018. Of these, 54 were in Europe, 26 in Japan and 39 in China.

 

 

Adjusted gross profit in the reported quarter was $922.6 million, up 22.8% year over year. As a percentage of revenues, gross margin in the quarter was 72.2%, up 40 basis points (bps).

 

Adjusted operating income totaled $505.6 million, up 22.8% year over year. As a percentage of revenues, operating margin in the quarter was 39.6%, up 20 bps

 

 

For 2020, the company expects full-year procedure growth within 13% to 16%, driven by U.S. general surgery and procedures outside the United States.

 

 

Intuitive Surgical ended the fourth quarter on a solid note. The flagship da Vinci procedures recorded solid growth in the quarter, which drove the core Instrument & Accessories arm. In fact, management continues to expect strong procedure growth in 2020. The company looks to accelerate business in China, which saw a solid fourth quarter as well. Overall international sales surged in the quarter. Expansion in gross and operating margins is an added positive.

 

On the flip side, the da Vinci system is in the early stages of adoption in some of the markets outside the United States which is likely to impede placements. Intense competition in the global MedTech space is concerning as well.

 

 

Other top-ranked stocks in the broader medical space are Cerner Corporation , DexCom (DXCM Quick QuoteDXCM - Free Report) and HealthEquity (HQY Quick QuoteHQY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

The Zacks Consensus Estimate for Cerner’s fourth-quarter revenues is pegged at $1.43 billion, suggesting a year-over-year increase of 5%. The same for EPS stands at 74 cents, indicating a year-over-year upside of 17.5%.

 

The Zacks Consensus Estimate for DexCom’s fourth-quarter revenues is pinned at $457 million, calling for a year-over-year increase of 35.2%. The same for EPS stands at 72 cents, hinting at year-over-year growth of 33.3%.

 

The Zacks Consensus Estimate for HealthEquity’s fiscal fourth-quarter revenues is pegged at $193.6 million, calling for a year-over-year increase of 155.5%. The same for EPS stands at 19 cents.

 

 

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