Intuitive Surgical da Vinci SP.
Intuitive reported second-quarter results that failed to meet the consensus forecast on Wall Street. The surgical robotics giant warned that COVID-19 will likely continue to have an adverse impact on da Vinci procedure volumes.
Sunnyvale, California–based Intuitive said last week that it earned $308 million, or 85¢ per share, off $1.52 billion in revenue for the quarter ended June 30, 2022, representing a 40% bottom-line slide and a top-line gain of 4% compared with the same quarter a year ago.
Adjusted to exclude one-time items, earnings per share were $1.14, a nickel behind The Street, where analysts were looking for EPS of $1.19 on sales of $1.56 billion.
Worldwide da Vinci procedures were up 14% year-over-year in Q2 — but system placements were down 15%.
During a conference call with analysts, Intuitive officials said that trade-ins of da Vinci robots are significantly down because there’s a lower volume of older-generation systems out there. Supply chain disruptions, especially in the semiconductor space, negatively affected the timing of system builds to meet orders. Hospitals, meanwhile, are feeling pressures on their spending, looking to achieve more efficiency gains off existing capital equipment before acquiring more.
Intuitive CEO Gary Guthart said customer demand for procedures was healthy in the second quarter despite a challenging global environment that included COVID-19 lockdowns in the company’s second-largest market — China. “The leading indicator of the health of our business, procedure demand, remains healthy,” he said.
Work continues on next generations of Intuitive’s robotic systems, though Guthart noted that deeper technological opportunities and clinical impact also mean deeper validation work.
“And we’re not afraid of that work. I’d rather do things that are really clinically meaningful for the customer. … So it’s taking a little longer to get to market than it used to, maybe more than a little, it’s costing us more to get there. But that change in environment also means that really well-designed systems probably have longer useful life in the field. And I think we’re starting to see that early evidence of that as well.”
Investors reacted by sending ISRG shares down more than 12% to $197.49 apiece in after-hours trading. By the middle of the next day, they were just down more than 5% to $212.48 apiece.
BTIG analyst Ryan Zimmerman walked away from Intuitive’s evening’s earnings call weighing two divergent assertions that seemed obvious in hindsight: Robotic surgery procedures remain solid as customers increase utilization, but the hospital capital expenditure environment is worse than expected.
“We are maintaining our Buy as we think the sell-off will be bought up by [long-term] investors coupled with ISRG’s own share buybacks and on the potential for a next-gen system launch. We think these are the catalysts needed to get shares working again.”
Editor’s Note: This article first appeared on sister website MassDevice.
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