Intuitive Surgical Cuts a Colossal Check: Fool by Numbers

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On Oct. 18, robotic surgery pioneer Intuitive Surgical (Nasdaq: ISRG) released third-quarter earnings for the period ended Sept. 30, 2007.

• The company sold 63 new robotic surgery systems during the quarter, including 17 outside the country. That's up from 46 systems sold a year ago, bringing the installed base up to 719 units across the globe.
• Intuitive is rapidly building a strong balance sheet, with no debt to speak of and a hefty cash position. Inventories are growing, but not nearly as fast as sales -- demand for its machines appears higher than the available supply.
• Intuitive Surgical is one of the top performers on our Motley Fool Rule Breakers scorecard, right next to other market thumpers like online jeweler Blue Nile (Nasdaq: NILE) and OLED pioneer Universal Display (Nasdaq: PANL). See the rest of the gang with a free 30-day trial pass to our early adopter money maker.

(Figures in thousands, except per-share data)

Income statement highlights

	Q3 2007	Q3 2006	Change
Sales	$156,904	$95,832	63.7%
Net Profit	$40,919	$17,263	137%
Diluted EPS	$1.04	$0.45	131.1%
Diluted Shares	39,271	38,184	2.8%

Get back to basics with the income statement.

Margin checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	69.1%	65.7%	3.5
Operating Margin	34.4%	27.5%	6.9
Net Margin	26.1%	18%	8.1

*Expressed in percentage points.

Margins are the earnings engine.

Balance sheet highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$533,489	$292,297	82.5%
Accounts Rec.	$120,456	$71,679	68%
Inventory	$26,773	$22,330	19.9%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable & Accrued Liabilities	$63,525	$36,230	75.3%

The balance sheet reflects the company's health.

Cash flow highlights
Free cash flow is a Fool's best friend. The company didn't let it out to play today, but Intuitive's full 10-Q statement tends to follow the earnings report within days. Stay tuned.

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