While Intuitive Surgical's (ISRG) Q1 revenue was in-line with the forecast given in its April 8 warning, the company has cut its 2014 procedure growth guidance to 2%-8%, down from a prior 9%-12%.
Q1 procedure growth was 7%, down from a Q4 level of 12% and a full-year 2013 level of 16%.
As previously forecast, systems revenue fell 56% Y/Y in Q1 to $106M. Intuitive blames U.S. systems weakness on lower procedure growth, Obamacare-driven changes in hospital spending priorities, and "the impact that anticipation of a new system may have had on customer capital-spending decisions."
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.).
The city of Birmingham pension fund recently joined the fray with its suit claiming that management knew of severe patient injuries and deaths related to the device as early as October 2011 but hid the information from regulators. Insider stock sales by certain executives during this time add fuel to the fund's complaint.
Intuitive faces 76 product liability lawsuits, suits from insurers accusing the firm of withholding claims and a securities class action complaint.
Shares are down 27% from the February 1, 2013 high of $585.67.
Analysts don't appear overly concerned. Consensus estimates for 2014 and 2015 are earnings of $14.96 on revenues of $2.3B and $17.09 on revenues of $2.5B, respectively.
1159 mutual funds have positions, down from 1256 a year earlier.