Seeking Alpha

Intuitive Surgical -8.1% AH on Q1 warning

  • Intuitive Surgical (ISRG) expects Q1 revenue of $465M, -24% Y/Y and well below a $537.9M consensus. The company partly blames "a $26 million deferral associated with a customer trade-out program for the newly launched da Vinci Xi Surgical System."
  • Intuitive is also taking a $67M pre-tax charge for "estimated costs of settling a number of product liability legal claims against the Company."
  • Q1 accessories revenue is expected to fall 2% Y/Y to $255M. Da Vinci systems revenue is expected to fall 59% to $106M. Service revenue is expected to rise 11% to $104M.
  • 87 da Vinci systems were shipped in Q1 (45 in the U.S.), down from 164 a year ago (115 in the U.S.).
  • Full Q1 results are due on April 22.

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Comments (9)
  • Dan Naumov
    , contributor
    Comments (355) | Send Message
     
    I am a big proponent of robotic surgery, but these numbers scream "run and don't look back" to me.
    8 Apr 2014, 05:33 PM Reply Like
  • csv26
    , contributor
    Comments (54) | Send Message
     
    Wow. I'm a big believer in robotic surgery's future and da Vinci/ISRG, BUT these numbers are very, very bad.
    The phrase I'm looking for is probably somewhere along the lines of "unmitigated disaster."

     

    I'm surprised it's only down 8%.
    8 Apr 2014, 05:51 PM Reply Like
  • tombo
    , contributor
    Comments (324) | Send Message
     
    8% sounds about right to me. Though I wouldn't mind a panic that would give me the chance to add to my position. I'm in for the long haul.

     

    They have the new robot out now. Will take a little time for the benefits of the new system to be sussed out and for surgeons to discover what the new features mean for opening up new procedure categories and driving growth. Short term you may see some benefits from an upgrade cycle, but I think that the real payoff in procedure growth is probably a year two down the road.

     

    Very short term it could be interesting to make an options bet on what will be coming on the 22nd. I expect the call to have a lot of questions about the new system, and it will give management a chance to spin this in a positive way.
    8 Apr 2014, 10:57 PM Reply Like
  • rambler1
    , contributor
    Comments (630) | Send Message
     
    They didn't know this the other day when they got the FDA approval? And people wonder why people have a disdain for the market. One day your a winner next week your a loser.
    8 Apr 2014, 06:13 PM Reply Like
  • Sierra Monolith Investments
    , contributor
    Comments (227) | Send Message
     
    ISRG offers a revolutionizing technology with an increasing procedural volume, growing international relevance, and a new machine that can redefine several procedures morbidity/mortality stats.

     

    ISRG has FCF inline with the industry, $3 billion in cash / no debt, an active stock buyback program, and they just released a new technology with insurmountable barriers to entry.
    8 Apr 2014, 07:06 PM Reply Like
  • gogogadget
    , contributor
    Comments (16) | Send Message
     
    "redefine several procedures morbidity/mortality stat."

     

    Problem is that the data show that robotic surgery has no more benefit than other forms of minimally invasive surgery in terms of morbidity/mortality for gynecological surgery (which has been a big push for ISRG). It is just more expensive.

     

    My patients love the idea of robotic surgery and it is "fun" to perform them. But in the tightening health care market, the days of selling >100 units per quarter is in the past. The accessories will be hit as well. My hospital is already limiting the number of surgeons having access to the robot.

     

    humble 2 cents
    8 Apr 2014, 07:25 PM Reply Like
  • Sierra Monolith Investments
    , contributor
    Comments (227) | Send Message
     
    In all due respect, for a Da Vinci, the degree of manipulations is dramatically reduced, and the articulations better than a human hand.

     

    For coronary bypass, Robot assist offers lower rates of major adverse cardiac or cerebrovascular events (MACCE) 12 months postprocedure (7.0% (robot) vs. 12.4% (traditional)) PMID: 24706301

     

    "My hospital is already limiting the number of surgeons having access to the robot."

     

    Good luck with your investments.
    8 Apr 2014, 07:58 PM Reply Like
  • gogogadget
    , contributor
    Comments (16) | Send Message
     
    As a surgeon I completely agree with the advantages of having a "smaller hand with more freedom of motion" inside a patient.

     

    However from ISGS point, they have to find procedures in all specialties which show a benefit to convince hospitals/groups to purchase.

     

    The data is mixed at best with some procedures in favor/ against/ the same in terms of morbidity/mortality.

     

    Best to you as well
    9 Apr 2014, 10:15 AM Reply Like
  • Leland Deane, MD, MBA
    , contributor
    Comments (28) | Send Message
     
    I knew the company was in trouble when I saw a spare robot in a hospital siting in a storage room. Over capacity problem.
    9 Apr 2014, 08:54 AM Reply Like
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