Tuesday, April 19, 2011

Intuitive Surgical Inc. (NASDAQ: ISRG): Q1 Earnings Preview 2011

Intuitive Surgical Inc. (NASDAQ: ISRG) is scheduled to release first-quarter earnings after the closing bell on Tuesday, April 19, 2011. Analysts, on average, expect the company to report earnings of $2.49 per share on revenue of $381.21 million. In the year ago period, the company reported earnings of $2.12 per share on revenue of $328.60 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?s 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.

In the preceding fourth quarter, the Sunnyvale, California-based company's net income was  $121.2 million, or $3.02 a share, compared with a profit of $77.5 million, or $1.95 a share, in the same period last year. Revenue increased 21% to $389.3 million.  Analysts, on average, expected the company to report earnings of $2.25 per share on revenue of $369.7 million. 

Intuitive’s recurring revenue stream continues to grow and provides a shield against cyclicality of revenues, arising from the sale of discretionary capital equipment to hospitals.  Intuitive Surgical’s razor-blade business model ensures recurring revenues even during difficult times. Moreover, its revenues have consistently grown due to the twin reasons of increase in applicable medical procedures and, secondly, hike in the company’s installed base.

During the quarter in review, the company's board of directors authorized the company to repurchase up to $400 million of its outstanding common stock.

The company's stock currently trades at a forward P/E (fye 31-Dec-10) of 27.82 and PEG ratio (5 yr expected) of 1.45. 

Full Disclosure: None.
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