Were These Intuitive Surgical Results Aided By Robots?

An 18 percent year-over-year increase in sales of the company’s da Vinci surgical robot systems helped Intuitive Surgical (NASDAQ:ISRG) beat Wall Street’s estimates for the fourth quarter.

On Tuesday, the medical device manufacturer reported a net profit of $175 million, or $4.25 per share for the three-month period, topping the $151 million, or $3.75 per share, reported in the same quarter last year and surpassing analysts’ predictions by 21 cents per share. Revenue also rose, increasing 23 percent to $609 million. In comparison, analysts had forecast results of $584.4 million.

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Da Vinci surgery robots, which are used increasingly for cardiac valve repair and gynecologic operations, drove the higher-than-expected results. In the three-month period, 175 systems were sold at $1.5 million each, representing a gain from 155 systems in the last quarter and 152 in the year-ago quarter. Additionally, the number of procedures in which the devices were employed grew by 25 percent…

Shares of Intuitive Surgical have risen nearly 6 percent so far this year, and the fourth quarter earnings statement sent shares up 8.74 percent to trade at $563.79 just after 6 p.m. Eastern Standard Time yesterday.

“By providing surgeons with superior visualization, enhanced dexterity, greater precision and ergonomic comfort, the da Vinci Surgical System makes it possible for more surgeons to perform minimally invasive procedures involving complex dissection or reconstruction,” said Intuitive Surgical, describing the robotic device in its earnings press release. “This ultimately has the potential to raise the standard of care for complex surgeries.”

The system has drawn the attention of analysts. Lazard Capital saw the system as an industry leader, with very little competition, and as a result increased its rating on shares of Intuitive Surgical from Neutral to a Buy last Monday. However, the da Vinci surgical system has also drawn some criticism that could devastate the company’s business if proven to be justified. Citron Research predicted last week that the number of da Vinci procedures will “dramatically soften” and new machine sales will “flatline” because of the dangers associated with the surgeries and the new medical-equipment taxes levied as a result of “Obamacare.”

Citron’s report argued that the company has made “outrageous marketing claims” about its surgical system that leave Intuitive Surgical in danger of legal proceedings. The firm also alleged that the device manufacturer failed to disclose the number of fatalities and injuries that were caused by the da Vinci procedures. Once this knowledge becomes public, the company’s profitability and share price could be significantly affected, Citron added.

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