SUNNYVALE, Calif. – Intuitive Surgical Inc. (NASDAQ:ISRG), reported strong fourth-quarter results on January 21 with profit up 53 percent on increased demand for its da Vinci surgical robot systems and higher instruments and accessories sales.
Intuitive, the leader in operative surgical robotics saw fourth-quarter net profits grow to $77.6 million, or $1.95 per share, from $50.8 million, or $1.27 per share, a year ago. That exceeded analysts’ average expectation by 24 cents a share, according to Thomson Reuters I/B/E/S.
Revenue jumped 40 percent to $323 million in 2009 from $231.5 million in 2008, exceeding Wall Street estimates of $292.7 million.
“I am continually surprised at the upside this company has consistently produced in a relatively tough market,” said Tycho Peterson, an analyst for JP Morgan.
The Sunnyvale-based company is the global industry leader in robotic-assisted, minimally invasive surgery. Its da Vinci surgical platform is used for cardiac, urology, gynecologic, pediatric and general surgical procedures.
Instruments and accessories sales rose 39 percent to $113.3 million from $81.6 million in the comparable quarter in 2008 fueling strong Q4 performance. The quarterly revenue from new surgical systems sales also increased 42 percent to $162.0 million, from $113.8 million in the previous year. Service revenue also inched up by 32 percent to $47.8 million compared to $36.2 million last year.
“We launched our Si system in Q2 of 2009 and by Q4, 79 percent of new system sales were from our Si product. We obtained FDA approval for a new indicator technology in da Vinci systems for trans-oral surgery, a procedures for which patient value is very high,” said Gary Guthart, President and CEO of Intuitive, in a statement.
Total revenue for the 2009 financial year grew to $1.052 billion, up 20 percent over 2008.
“Strong growth in international markets was the key to our robust overall performance. Our international procedures grew by 60 percent over 2008,” Guthart said.
“Some of our highest growth procedures, those with 100 percent year-over-year growth or higher for 2009 include hysterectomy, partial nephrectomy, sacrocolpopexy, colon and rectal resections, and thyroidectomy, the latter concentrated in Asia,” he added, during the earnings call.
The S&P outlook for the health care equipment sub-industry for the next 12 months is neutral. According to its latest sector scorecard published on Jan 15, “many of the core product categories are historically recession-resistant and will continue to grow regardless of more restrictive credit market conditions.” However, the report cautioned that demand for elective medical procedures were slowing down, while the average procedure rates for some mandatory surgeries are also seeing a slow reduction.
For 2010, Intuitive expects revenue to grow by 25 percent with procedures growing by 35 percent over 2009 levels.
“The outlook is quite positive for Intuitive,” said David Lewis, an analyst for Morgan Stanley, adding that based on past history he believes the forecast is most likely a conservative one.
Intuitive expects that Japan, the newest international market in which the da Vinci robot system won official approval would become a lucrative new revenue source. But the company cautioned that success in Japan will come slowly. It declined to speculate on when it will get clearance for insurance reimbursements for surgeries performed using the da Vinci system in Japan.
Lewis said he expects Japanese revenue to become a factor in 2011. “When it does kick in, it’s going to be big,” he said.
The company expects to complete its 155,000 square feet manufacturing facility in Sunnyvale by 2011. Intuitive shares, which have more than tripled in the past 10 months, rose 7.7 percent to $328 in after hours trading from their Nasdaq close at $304.49.
