Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Intuitive Surgical Earnings: Mark Your Calendar

By Daniel Sparks - Dec 27, 2018 at 7:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here's what to watch when the da Vinci robot maker reports fourth-quarter results.

Shares of Intuitive Surgical ( ISRG -1.74% ) have taken a hit with the rest of the market recently, falling 18% since Oct. 1. But shares are still up 28% over the past 12 months, reflecting the company's strong underlying performance recently. Can the company keep up its momentum and possibly even reinvigorate the stock's bullish run when Intuitive Surgical reports earnings next month?

The company, which makes the minimally invasive surgical robot named da Vinci, reports its fourth-quarter results on Jan. 24. Ahead of the fourth-quarter update, here's a preview of some of the key areas investors will want to watch.

A surgeon console, surgeon, da Vinci patient cart, and instruments

Image source: Intuitive Surgical.https://www.intuitivesurgical.com/company/media/images/singlesite.php

Procedure growth

One important metric for Intuitive Surgical Investors to watch every year is da Vinci procedures. Procedure trends are indicators of the company's customers' adoption and utilization of Intuitive Surgical's products and services.

This metric has been on a roll recently, with year-over-year growth rates in procedures accelerating. In the company's first, second, and third quarters of 2018, procedures increased 15%, 18%, and 20%, respectively. This momentum has been driven by growth in U.S.-based general surgery procedures and worldwide adoption of urologic procedures, management said in the company's third-quarter earnings release.

In Intuitive Surgical's third-quarter earnings call, the company increased its outlook for full-year 2018 procedure growth, suggesting management is optimistic about continued momentum in Q4. Management now expects procedures in 2018 to increase 17% to 18% year over year -- up from previous guidance for 14.5% to 16.5% growth. 

da Vinci shipments

Intuitive Surgical's strong performance recently is particularly evident by the company's growth in da Vinci system shipments. Intuitive Surgical shipped 231 systems in Q3 -- up 37% from the systems shipped in the same quarter last year.

For Q4, management says it expects its year-over-year growth rate in system placements during the period to decelerate from the 30%-plus growth seen in recent quarters, implying expectations for a growth rate in the high twenties.

Instrument revenue

Another key metric to watch is Intuitive Surgical's growth in instrument revenue, or revenue from instruments and accessories that need to be replaced regularly. Driven primarily by growth in procedures, instrument revenue is unsurprisingly on the upswing, as well.

Instrument revenue rose 21% year over year in Q3, to $486 million. With strong procedure growth expected to persist in Q4, investors should look for similar growth in the metric in Q4.

Accounting for over half of Intuitive Surgical's total revenue, instruments is the company's most important segment. Systems and services -- the company's two other segments -- accounted for 30% and 17% of revenue, respectively.

Intuitive Surgical is scheduled to report fourth-quarter results after market close on Thursday, Jan. 24.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intuitive Surgical, Inc. Stock Quote
Intuitive Surgical, Inc.
ISRG
$321.63 (-1.74%) $-5.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.