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Intuitive Surgical (ISRG) Q3 Earnings Match Estimates, Up Y/Y

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Intuitive Surgical, Inc. ISRG reported third-quarter 2021 adjusted earnings per share (EPS) of $1.19, in line with the Zacks Consensus Estimate. The bottom line improved 29.3% from the year-ago quarter.

GAAP EPS in the quarter was $1.04, compared with the year-ago quarter’s figure of 87 cents.

Revenue Details

The Zacks Rank #2 (Buy) company reported revenues of $1.40 billion, which surged 30.2% from the prior-year quarter. The top line outpaced the Zacks Consensus Estimate by 0.7%.

Segment Details

Instruments & Accessories

Revenues at the segment totaled $755.4 million, reflecting year-over-year improvement of 19.8%. This can be attributed to 20% growth in da Vinci procedure volume.

Systems

In the reported quarter, System revenues surged 55% year over year to $415.2 million. In fact, the company shipped 336 da Vinci Surgical Systems in the quarter, compared to 195 systems in the prior-year quarter.

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

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

Services

Services revenues were $232.7 million, up 29.8% from the year-ago quarter.

Outside the United States, revenues totaled $451.1 million, up 35.1% on a year-over-year basis.

Outside the United States, Intuitive Surgical placed 109 systems in the third quarter compared with 79 in the prior-year quarter. Of these, 47 were in Europe, 20 in Japan and 17 in China.

Margins

Adjusted gross profit in the reported quarter was $999.9 million, up 32.1% year over year. As a percentage of revenues, gross margin in the quarter was 71.3%, up 110 basis points (bps).

Selling, general and administrative expenses amounted to $363.3 million, up 21.5% from the prior-year quarter. Research and development expenses totaled $165.5 million, up 6.8% on a year-over-year basis.

Adjusted operating income totaled $570 million, up 41.7% year over year. As a percentage of revenues, operating margin in the quarter was 40.6%, up 330 bps.

Financial Position

The company exited the third quarter with cash, cash equivalents and investments of $8.22 billion, compared with $7.73 billion in the previous quarter.

Total assets were $12.93 billion, compared with $12.29 billion sequentially.

Outlook

Due to persistent uncertainty surrounding the extent and duration of the pandemic, and the timing of global recovery and economic normalization; the company cannot ascertain the future impact on its operations and financial performance during this time. Consequently, the company has refrained from issuing any guidance for 2021.

Wrapping Up

Intuitive Surgical ended the third quarter on a mixed note, wherein earnings met the consensus mark while revenues beat the same. The company displayed strong segmental performance in the quarter under review. It witnessed growth in da Vinci procedure volume in the third quarter. Expansion in both gross and operating margins is positive. Overall international sales improved in the third quarter.

Per management, substantial disruption triggered by COVID-19 pandemic due to the rise of the Delta variant during the third quarter impacted the company’s procedures. Despite this challenging environment, the company continued to witness growth in its products in the quarter under review and capital demand remained robust.

However, intense competition in the global MedTech space remains a concern.

Other Key Picks

Some other top-ranked stocks, which are expected to report earnings soon, are DexCom, Inc. DXCM, Omnicell, Inc. OMCL and Becton, Dickinson and Company BDX, each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for DexCom’s third-quarter 2021 adjusted EPS is currently pegged at 62 cents. The consensus mark for third-quarter revenues stands at $612.5 million.

The Zacks Consensus Estimate for Omnicell’s third-quarter 2021 adjusted EPS is currently pegged at 80 cents. The consensus mark for third-quarter revenues stands at $283.8 million.

The Zacks Consensus Estimate for Becton Dickinson’s fourth-quarter fiscal 2021 adjusted EPS is currently pegged at $2.42. The consensus mark for revenues stands at $4.90 billion.


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