It hasn't been an easy road for Intuitive Surgical (NYSE:
) bulls in recent months. The stock has been in a downtrend since
late April as investors question growth prospects ahead.
High-multiple stocks like Intuitive Surgical are held to a
high standard during earnings season and the company didn't
disappoint, temporarily allaying fears about slowing growth.
Growth-fund managers love accelerating sales growth, and
Intuitive Surgical showed it across many areas when the company
reported fourth-quarter results Tuesday after the close.
Fourth-quarter profit at Intuitive Surgical rose 13 percent to
$4.25 a share, above the Thomson Reuters consensus estimate of
Sales growth had been decelerating in recent quarters, but
growth re-accelerated in the fourth quarters, rising 23 percent
from a year ago to $609.3 million. Analysts were modeling $584.4
Revenue from system sales rose 18 percent to $264.9 million,
an acceleration from 17 percent growth in the third quarter.
Revenue from instrument and accessory sales rose 29 percent to
$253.8 million, an acceleration from 24 percent growth in the
The company sold 175 da Vinci systems in the quarter, up 15
percent from a year ago. Overall procedures rose 25 percent from
a year ago, driven mostly by U.S. gynecological and general
surgery growth. The da Vinci system is also used in other
surgical procedures including urologic, cardiothoracic and
prostatectomies. Intuitive's bread-and-butter procedure used to
be prostatectomies but not anymore as medical treatment for
prostate cancer shifts away from surgery.
Internationally, Intuitive Surgical continues to make
progress. In the fourth quarter, the company received clearance
to start selling the da Vinci system in Japan. Shipments should
start in the first quarter. In Europe, Intuitive saw a
"significant increase" in system sales, but CEO Gary Guthart
said: "We have more work to do in building our organization to
perform in a challenging environment. We expect these challenges
in Europe and our investments to continue for the next several
Price and volume trends in Intuitive Surgical were suspect to
say the least ahead of the results. Since late April, the
company's market capitalization dropped by nearly $3 billion. The
stock cratered 10.7 percent over two sessions just before
Christmas after Citron Research made negative amounts about the
Concerns about slowing growth are in the rear-view mirror for
now. In pre-market trading, shares of Intuitive Surgical soared
8.4 percent to $562.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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