Thursday, April 8, 2010

Intuitive Surgical Inc.(NASDAQ: ISRG): Q1 Earnings Preview 2010

Intuitive Surgical is scheduled to release Q12010 earnings after the closing bell on Thursday, April 15, 2010. Analysts, on average, expect the company to report earnings of $1.68 per share in the first quarter with estimates ranging from a low of $1.33 to a high of $2.02 per share. Revenues for the quarter are estimated to be $294.58 million. In Q12009, the company reported earnings of $0.72 per share on revenue of $188.37 million.

Intuitive Surgical Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of da Vinci surgical systems for use in urologic, gynecologic, cardiothoracic, and general surgeries. Its surgical systems consist of a surgeon'ss console, a patient-side cart, a vision system, and wristed instruments and surgical accessories. The da Vinci System is a surgical platform designed to enable complex surgery using a minimally invasive approach. The da Vinci System consists of an ergonomic surgeon console, a patient-side cart with four interactive robotic arms, a high-performance vision system and proprietary EndoWrist instruments. The company enjoys monopoly over minimally invasive surgically robotics. The company makes money not just from selling machines, but also on service and tools used during surgery, giving it an attractive business model.

In the preceding Q42009, the Sunnyvale, California-based company reported that its net income jumped to $77.6 million or $1.95 per share from $50.8 million or $1.27 per share in the fourth quarter a year-ago. Revenue soared 40% to $323.0 million from $231.5 million for the fourth quarter a year-ago. Analysts, on average, expected the company to report earnings of $1.71 per share on revenue of $292.72 million. The company sold 110 systems in the fourth quarter of 2009 compared with 85 systems last year and 86 systems in third quarter.

The company expects to achieve annual revenue growth of approximately 25% in 2010. It expects its gross margin to average between 71% and 71.5%. Total procedures is expected to grow approximately 35% for the year from the 205,000 procedures performed in 2009. Intuitive Surgical is poised to benefit from a rebound in hospital spending, growing international exposure and the expanding necessity of the company’s products.

In terms of stock performance, Intuitive Surgical shares have gained nearly 7 percent since the beginning of the year.

Full Disclosure: None.
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