Will Instruments Drive Intuitive Surgical (ISRG) Q3 Earnings?
Intuitive Surgical Inc ISRG is expected to release third-quarter 2018 results on Oct 18, after market close. The company expects steady growth in the Instruments and Accessories segment.
Revenues in other segments are likely to aid the company to generate solid results.
Second-Quarter Results
Intuitive Surgical reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted Earnings improved 38% year over year.
Revenues totaled $909.3 million, up 19.8% from the prior-year quarter’s tally. The figure also surpassed the Zacks Consensus Estimate of $870 million.
The upside was backed by higher worldwide da Vinci procedures led by growth in U.S. general surgery procedures and global urologic procedures.
Which way are the Estimates Treading?
For the third quarter, the Zacks Consensus Estimate for revenues is pinned at $917 million, indicating year-over-year increase of 13.8%. The consensus estimate for earnings is $2.65, reflecting a year-over-year decline of 4.3%.
The company delivered positive earnings surprises in the past four quarters, the average being 21.6%.
Let’s delve deeper
Intuitive Surgical, Inc. Price and Consensus
Intuitive Surgical, Inc. Price and Consensus | Intuitive Surgical, Inc. Quote
Instruments & Accessories in Focus
The Instruments and Accessories segment delivered solid results in the last quarter, which contributed 52.4% to total revenues. The flagship da Vinci surgical system continues to be a revenue driver for the segment. In the second quarter, da Vinci procedures grew approximately 18% fromyear-ago quarter’s figure.
For the third quarter, the Zacks Consensus Estimate for Instruments & Accessoriesrevenues in United States is pegged at $361 million, showing a rise of 4.1% on a sequential basis.
Other Factors at Play
Services
The Zacks Consensus Estimate for net Services revenues is peggedat $162 million, up 10.2% year over year. In the last reported quarter, Services revenues came in at $155.8, up 11.4% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for Services revenues in the United States is pegged at $117 million, reflecting an increase of 4.5% on a sequential basis.
Guidance
For 2018, Intuitive Surgical continues to expect adjusted gross profit margin in the range of 70-71.5% of net revenues. Management expects non-cash stock compensation expenses between $245 million and $255 million.
Strong guidance for 2018 indicates bright prospects for the quarter to be reported.
Earnings Whispers
Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. This is not the case here as you will see below.
Earnings ESP: Intuitive Surgical has an Earnings ESP of -0.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Intuitive Surgical carries a Zacks Rank #2.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat in their upcoming quarterly results.
Bio-Rad Laboratories BIO has an Earnings ESP of +9.60% and a Zacks Rank #3.
Baxter International Inc BAX has an Earnings ESP of +0.90% and a Zacks Rank #2.
Masimo Corporation MASI has an Earnings ESP of +0.98% and a Zacks Rank #2.
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Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
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