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Intuitive Surgical (ISRG) Q1 Earnings Beat Estimates, Up Y/Y
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Intuitive Surgical, Inc. (ISRG - Free Report) reported first-quarter 2020 adjusted earnings per share (EPS) of $2.69, beating the Zacks Consensus Estimate of $2.54 by 5.9%. Adjusted EPS also improved 3.1% year over year.
The Zacks Rank #3 (Hold) company reported revenues of $1.09 billion, which improved 12.9% from the prior-year quarter. The figure also outpaced the Zacks Consensus Estimate of $1.03 billion.
Segment Details
Instruments & Accessories
Revenues at the segment came in at $617.5 million, reflecting a year-over-year increase of 11.8% owing to 10% growth in da Vinci procedure volume.
Systems
In the reported quarter, System revenues improved 14.5% year over year to $283.3 million. Notably, the company shipped 237 da Vinci Surgical Systems in the quarter, up 1% from the prior-year quarter.
Services
Services revenues came in at $198.7 million, up 14.3% from the year-ago quarter.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Outside the United States, revenues totaled $317.9 million, up 12.7% on a year-over-year basis.
Outside the United States, Intuitive Surgical placed 55 systems in the first quarter compared with 81 in the prior-year quarter. Of these, 25 were in Europe, 10 in Japan and nine in China.
Margins
Adjusted gross profit in the reported quarter was $765.9 million, up 10.5% year over year. As a percentage of revenues, gross margin in the quarter was 67.1%, down 170 basis points (bps).
Adjusted operating income totaled $384.3 million, up 6.3% year over year. As a percentage of revenues, operating margin in the quarter was 25.7%, down 20 bps.
Outlook
Per the preliminary announcement, the company has withdrawn full-year 2020 outlook and procedure guidance on account of the uncertainty surrounding the global pandemic and the timing of global recovery and economic normalization. As a result, the company cannot provide the future impact on its operations and financial performance during this time.
Wrapping Up
Intuitive Surgical ended the first quarter on a solid note. The company witnessed increase in procedures and systems placements along with higher service and operating lease revenues. This, in turn, contributed to the revenue growth in the quarter under review. The flagship da Vinci procedures recorded solid growth in the quarter, which drove the core Instrument & Accessories arm. Overall international sales improved in the quarter.
In February, Intuitive Surgical acquired Orpheus Medical Ltd. and its wholly owned subsidiaries, which will enable the former to expand and enhance its integrated informatics platform.
Meanwhile, the company witnessed contraction in gross and operating margins in the quarter. Intense competition in the global MedTech space remains a concern.
The Zacks Consensus Estimate for DexCom’s first-quarter 2020 revenues is pegged at $356.5 million, suggesting a year-over-year improvement of 27.1%. The same for EPS stands at 10 cents, indicating year-over-year growth of 300%.
The Zacks Consensus Estimate for Chemed’s first-quarter 2020 revenues is pegged at $523.6 million, suggesting year-over-year growth of 13.3%. The same for EPS stands at $3.65, indicating year-over-year improvement of 25%.
The Zacks Consensus Estimate for ResMed’s third-quarter fiscal 2020 revenues is pegged at $722.3 million, suggesting year-over-year improvement of 9.1%. The same for EPS stands at $1.04, indicating growth of 16.9% from the year-ago reported figure.
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Intuitive Surgical (ISRG) Q1 Earnings Beat Estimates, Up Y/Y
Intuitive Surgical, Inc. (ISRG - Free Report) reported first-quarter 2020 adjusted earnings per share (EPS) of $2.69, beating the Zacks Consensus Estimate of $2.54 by 5.9%. Adjusted EPS also improved 3.1% year over year.
The Zacks Rank #3 (Hold) company reported revenues of $1.09 billion, which improved 12.9% from the prior-year quarter. The figure also outpaced the Zacks Consensus Estimate of $1.03 billion.
Segment Details
Instruments & Accessories
Revenues at the segment came in at $617.5 million, reflecting a year-over-year increase of 11.8% owing to 10% growth in da Vinci procedure volume.
Systems
In the reported quarter, System revenues improved 14.5% year over year to $283.3 million. Notably, the company shipped 237 da Vinci Surgical Systems in the quarter, up 1% from the prior-year quarter.
Services
Services revenues came in at $198.7 million, up 14.3% from the year-ago quarter.
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Intuitive Surgical, Inc. price-consensus-eps-surprise-chart | Intuitive Surgical, Inc. Quote
Outside the United States, revenues totaled $317.9 million, up 12.7% on a year-over-year basis.
Outside the United States, Intuitive Surgical placed 55 systems in the first quarter compared with 81 in the prior-year quarter. Of these, 25 were in Europe, 10 in Japan and nine in China.
Margins
Adjusted gross profit in the reported quarter was $765.9 million, up 10.5% year over year. As a percentage of revenues, gross margin in the quarter was 67.1%, down 170 basis points (bps).
Adjusted operating income totaled $384.3 million, up 6.3% year over year. As a percentage of revenues, operating margin in the quarter was 25.7%, down 20 bps.
Outlook
Per the preliminary announcement, the company has withdrawn full-year 2020 outlook and procedure guidance on account of the uncertainty surrounding the global pandemic and the timing of global recovery and economic normalization. As a result, the company cannot provide the future impact on its operations and financial performance during this time.
Wrapping Up
Intuitive Surgical ended the first quarter on a solid note. The company witnessed increase in procedures and systems placements along with higher service and operating lease revenues. This, in turn, contributed to the revenue growth in the quarter under review. The flagship da Vinci procedures recorded solid growth in the quarter, which drove the core Instrument & Accessories arm. Overall international sales improved in the quarter.
In February, Intuitive Surgical acquired Orpheus Medical Ltd. and its wholly owned subsidiaries, which will enable the former to expand and enhance its integrated informatics platform.
Meanwhile, the company witnessed contraction in gross and operating margins in the quarter. Intense competition in the global MedTech space remains a concern.
Key Picks
Some better-ranked stocks in the broader medical space are DexCom, Inc. (DXCM - Free Report) , Chemed Corporation (CHE - Free Report) and ResMed Inc. (RMD - 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 DexCom’s first-quarter 2020 revenues is pegged at $356.5 million, suggesting a year-over-year improvement of 27.1%. The same for EPS stands at 10 cents, indicating year-over-year growth of 300%.
The Zacks Consensus Estimate for Chemed’s first-quarter 2020 revenues is pegged at $523.6 million, suggesting year-over-year growth of 13.3%. The same for EPS stands at $3.65, indicating year-over-year improvement of 25%.
The Zacks Consensus Estimate for ResMed’s third-quarter fiscal 2020 revenues is pegged at $722.3 million, suggesting year-over-year improvement of 9.1%. The same for EPS stands at $1.04, indicating growth of 16.9% from the year-ago reported figure.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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