Intuitive Surgical (ISRG) is set to report earnings after the close tomorrow. For those not familiar with the name, ISRG develops robotic surgical systems and has gone from the single digits in 2003 to a price of $344 today. To say that ISRG has been a good performer since going public would be the understatement of the year.
Part of that performance has been caused by the astonishing moves it has made in reaction to its quarterly earnings reports. As shown in the bottom table below, the company has beaten earnings estimates 100% of the time for the quarterly reports we have on file since mid-2004. Its average 1-day change in reaction to all earnings reports has been 11.24% (yes, 11.24%), and it has gained an average of 16.79% on the day following its last 5 reports. On the day following its evening report on January 31st, it was up $51.61 (20.32%), and it went up 32% following its July 2007 report.
To say that expectations are high for tomorrow's report is also a huge understatement. With investors so used to an earnings "beat" along with big gains, anything less than a strong beat will most likely be met with heavy selling pressure. But we thought the same thing prior to its last report and once again it didn't disappoint.
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