* 1st quarter EPS $3.50 vs Street view $3.14
* Revenue up 28 pct to $495 million
* Sees 2012 rev growth 19-21 pct; procedures up 25-27 pct
* Intuitive shares rise 5.7 percent
By Bill Berkrot
April 17 (Reuters) – Intuitive Surgical Inc
reported higher-than-expected first-quarter profit on Tuesday on
increased sales of its high-priced da Vinci surgical robots and
a rise in procedures using the systems and its shares rose
nearly 6 percent.
Based on the first quarter performance, the company slightly
raised its full-year forecast for revenue and procedure growth.
Intuitive now sees 2012 revenue growing by 19 percent to 21
percent, up from its previous forecast of 17 percent to 19
percent. It expects procedures to grow by 25 percent to 27
percent, up from a prior view of 24 to 26 percent.
“After a quarter like this, there was no way they were going
to maintain their guidance,” said ThinkEquity analyst Spencer
Nam.
“The guidance is very conservative and remains so even
though they raised it a little bit,” said Michael Matson, an
analyst for Mizuho Securities.
The one disappointment for the quarter was sales of da Vinci
systems in Europe, where only 14 of the 140 sold in the period
were purchased and which the company called below historic
trends.
“European systems sales reflect the challenging economic
environment,” Chief Executive Gary Guthart told analysts on a
conference call.
The company said it believes capital spending by European
hospitals “will remain pressured for some time to come.”
Intuitive posted a net profit of $144 million, or $3.50 per
share, compared with a profit of $104 million, or $2.59 per
share, a year ago. That exceeded analysts’ average expectations
by 36 cents a share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter jumped 28 percent to $495 million,
topping Wall Street estimates of $464.1 million.
“It was a good quarter,” said Matson. “Everyone expected
them to beat, but that said, it was a bigger beat than I
expected. Some of it was from a lower tax rate, but even if you
take that out, they still beat by a lot.”
Instruments and accessories sales rose 32 percent to $208
million, while procedures grew 29 percent, primarily driven by
growth in U.S. gynecological surgeries using da Vinci systems.
While the da Vinci systems are primarily used in delicate
prostate and gynecological procedures, the company said it was
seeing solid growth in other general surgeries, particularly for
colon and rectal cancer surgery. Use of the surgical robots has
been associated with shorter hospital stays, reduced bleeding
and fewer complications.
The 140 da Vinci systems sold in the quarter at an average
price of $1.47 million each was up from 120 a year ago, but a
decline from the 152 systems sold in the prior quarter.
Of those sold, 80 went to repeat customers and 46 were
trade-ins of older models.
Some 105 da Vinci systems were sold in the United States in
the quarter and 7 were sold in Japan, which is expected to
become a significant market for Intuitive.
Earlier this month, the company celebrated its first
reimbursement approval in Japan for da Vinci prostatectomies.
Going forward, Intuitive said reimbursement decisions for
additional procedures will be pursued by Japanese surgical
societies.
“Things are looking up in Japan, but we haven’t seen the
full potential from that country yet. There is more upside
there,” said Nam.
With new products and system upgrades gaining traction, Nam
said “it’s early to say, but we may be seeing the second
renaissance of da Vinci here.”
Intuitive Surgical shares rose to $577 in after hours
trading from a Nasdaq close at $545.53. The company’s high
flying shares were already up more than 17 percent for the year
and up about 56 percent since early October.
