What's in the Cards for Intuitive Surgical (ISRG) Q2 Earnings?

Intuitive Surgical, Inc. ISRG is scheduled to release second-quarter 2020 results on Jul 21, after the closing bell.

In the last reported quarter, the Zacks Rank #4 (Sell) company delivered earnings surprise of 5.9%. Its earnings surpassed estimates in each of the trailing four quarters, the average beat being 10.7%.

Factors to Note

The Instruments & Accessories segment is likely to have witnessed a weak second-quarter. In fact, the Zacks Consensus Estimate for this segment’s second-quarter earnings stands at $367 million, suggesting a sharp decline of 36.6% from the year-ago quarter. Unlike first-quarter 2020, which had witnessed partial impact of the COVID-19 pandemic, the second quarter bore the brunt of it. This resulted in the deferral of elective and non-critical procedures, which might have weighed on da Vinci procedure volume in the to-be-reported quarter.

With aggravation of the COVID-19 pandemic, its procedure volume and system placement disruption is likely to have aggravated. Consequently, the company’s second-quarter results may reflect the impact of such disruptions.

Intuitive Surgical, Inc. Price and EPS Surprise


Intuitive Surgical, Inc. Price and EPS Surprise

Intuitive Surgical, Inc. price-eps-surprise | Intuitive Surgical, Inc. Quote

Further, the flagship — da Vinci surgical system — that has been driving revenues consistently for the segment might have been impacted by the aforementioned procedural delays and system placement disruption. This, in turn, is likely to have impacted its second-quarter performance.

Similarly, revenues from other two segments — Systems and Services — are likely to have witnessed decline in revenues in the to-be-reported quarter.

For the quarter to be reported, the Zacks Consensus Estimate for Services stands at $162 million, indicating a decline of 8.5% from the prior-year reported figure. The same for Systems is pegged at $153 million, suggesting a plunge of 55.6% from the year-ago quarter.

In fourth-quarter 2019, Intuitive Surgical announced that it is in the Phase I launch of the da Vinci SP, having installed six systems in the fourth quarter. Moreover, the company initiated the launch of SynchroSeal sealing and transection device for use in general surgery in fourth-quarter 2019. The company, therefore, continues to introduce technologies for surgical systems and strengthening product portfolio.

Further, in November 2019, the company had received FDA clearance for the SynchroSeal instrument and E-100 generator. SynchroSeal is a single-use, bipolar, electrosurgical instrument created for grasping, dissection, sealing, and transection of tissue that provides enhanced versatility to its da Vinci Energy portfolio. The E-100 generator is an electrosurgical generator developed to power two key instruments — Vessel Sealer Extend and SynchroSeal — on the da Vinci X and Xi Surgical Systems.

The aforementioned clearances and approvals are likely to have driven Intuitive Surgical’s second-quarter performance.

Stocks Worth a Look

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Integra LifeSciences Holdings Corporation IART has an Earnings ESP of +20.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +23.14% and a Zacks Rank of 2.

Thermo Fisher Scientific Inc. TMO has an Earnings ESP of +14.37% and a Zacks Rank of 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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