Intuitive Surgical, Inc.
) continues to face troubles due to its rudimentary robotic
surgical systems. Despite the company's continuous propaganda
about robotic-assisted surgery and its aggressive marketing
strategy, recent incidents suggest that everything is not well.
An information released by U.S. Food and Drug Administration
(FDA) on Dec 3 regarding a warning letter issued by ISRG on Nov
19 mentioning certain problems about their da Vinci robots turned
the stock red yesterday.
The letter stated that da Vinci instrument arms may experience
abnormal friction, causing the device to suddenly stall and make
an imprecise surgical cut. As a result, the company plans to
recall 1,386 da Vinci systems worldwide.
Shares of Intuitive Surgical started trading at a very low-level
of $367.49 yesterday, a 1.4% decline compared to the day before.
However, they settled down at a higher level of $370.68 at the
closing (still reflecting a fall of 0.6%), thanks to the comments
by renowned journalist Herb Greenberg, who negated the investor
sentiment driving the selloff.
Several reports have revealed that patients suffered
complications or injuries owing to the robotic-assisted
surgeries. However, it seems that Intuitive Surgical only cares
about promoting the robotic-assisted surgery as an alternative to
conventional surgery but their propagative ideas often lacked
concrete proof and ignored several complications that could arise
due to robotic surgeries.
ISRG generates revenues from da Vinci systems as well as
disposable instruments that are replaced after each procedure. da
Vinci system uses robots, cameras and a remote-control console to
perform gall bladder removals, hysterectomies, cardiovascular
operations and prostatic surgeries.
Intuitive Surgical is going through a rough patch this year.
Although the company's earnings of $3.99 per share beat the Zacks
Consensus Estimate in the third quarter of the year, it fell
10.5% from $4.46 per share in the third quarter of 2012. Revenues
in the quarter dipped 7% to $499 million, missing the Zacks
Consensus Estimate of $527 million.
Over a year, ISRG shares lost 29.7%. The Zacks Consensus Estimate
earnings rose 3.0% to $16.22 for 2013 but fell 2.3% to $17.00 for
2014 over the last 60 days. Currently, the stock has a Zacks Rank
Some better-ranked stocks that are worth a look in the medical
instruments industry include
Natus Medical Inc.
). CryoLife and Natus Medical carry a Zacks Rank #1 (Strong Buy)
while AngioDynamics carries a Zacks Rank #2 (Buy).
ANGIODYNAMICS (ANGO): Free Stock Analysis
NATUS MEDICAL (BABY): Free Stock Analysis
CRYOLIFE INC (CRY): Free Stock Analysis
INTUITIVE SURG (ISRG): Free Stock Analysis
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