Intuitive Surgical Inc.
) reported net earnings of $4.28 per share for the fourth quarter
of 2013, which exceeded the Zacks Consensus Estimate of $3.79 and
were up 1% year over year. However, net earnings of $166.2
million went down 4.9% from the fourth quarter of 2012.
Full year adjusted earnings per share (after adjusting for
certain discrete tax benefits) came in at $17.59, registering a
beat over the Zacks Consensus Estimate of $16.32 and the 2012
adjusted earnings of $17.10.
Revenues in the quarter dipped 5% to $576 million. However,
the result exceeded the Zacks Consensus Estimate of $551 million.
The year-over-year decline was due to pressure on gynecology
surgery, dispute related to some da Vinci procedures along with
changing capital spending priorities in hospitals due to the
implementation of the Affordable Care Act.
2013 revenues were up 4% to $2,265 million although the figure
lagged the Zacks Consensus Estimate of $2,300 million.
Instruments and Accessories
grew 6% to $268 million on the back of 12% year-over-year rise in
da Vinci surgical procedures due to growth in U.S. general
surgery, U.S. gynecology and international urology
plunged 23% to $205 million due to slower growth in benign
gynecology combined with changing hospital capital spending
priorities. Intuitive Surgical sold 37 da Vinci Surgical systems
lesser than 175 systems sold in the prior-year quarter.
rose 14% to $103 million. The increase can be attributable to
higher installed base of da Vinci Surgical Systems.
Operating income slashed 15.9% year over year to $208.6
million. With this, operating margin declined 130 basis points to
Intuitive Surgical had cash, cash equivalents and investments
of $2.8 billion as of Dec 31, 2013, down from $2.9 billion as of
Dec 31, 2012. The company spent $1.1 billion to repurchase about
2.6 million shares in the year, reflecting an average price of
Intuitive Surgical continues to be affected by stiff hospital
capital spending environment and sluggish benign gynecologic
procedures in the U.S. These are taking a toll on the sale of its
da Vinci Surgical systems.
Despite the beat, investors are skeptical due to lower profits
in the third quarter. This disappointment has reflected in the
0.03% fall in stock price after the market closed yesterday.
However, going forward in 2014, Intuitive Surgical expects
stabilization in procedure growth rate with full-year procedures
growing in the range of 9% to 12%. Moreover, in the upcoming
quarter, the company expects a prominent quarterly seasonality
with increasing proportion of benign procedures in its procedure
We prefer to remain on the sidelines about this Zacks Rank #3
(Hold) at present. Instead, some better-ranked stocks worth
reckoning in the medical instruments industry include
Natus Medical Inc.
). While Natus Medical sports a Zacks Rank #1 (Strong Buy), the
other two stocks carry a Zacks Rank #2 (Buy).
ANGIODYNAMICS (ANGO): Free Stock Analysis
NATUS MEDICAL (BABY): Free Stock Analysis
CEPHEID INC (CPHD): Free Stock Analysis
INTUITIVE SURG (ISRG): Free Stock Analysis
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