Intuitive Surgical's revenue soars, but investors punish stock

Intuitive Surgical ($ISRG), maker of the da Vinci surgical robots and other related devices and instruments, booked $537 million in revenue during its 2012 second quarter, up a whopping 26% compared to the same period in 2011, as it attracted broader general surgery and gynecological procedure business. So you'd think stockholders would be pleased.

They weren't. Spooked investors drove the Sunnyvale, CA-company's stock down more than 8.5% in mid-day trading. The likely reason: Intuitive reported some softness in its prostatectomy procedures, as MassDevice and others noted.

But everything else seems to be coming up roses. The company said its astounding second-quarter revenue hike stems from two things: continued adoption of da Vinci surgery procedures and also higher sales of the da Vinci Surgical System. And even with the more-than-$45 stock price drop, however, it is still rather robust–at $498.38.

Broken down, the company boosted instruments and accessories revenue by 30% during the quarter, from $172 million to $224 million. Despite the dip in prostatectomy procedures, overall procedures grew 26%, propelled by more U.S. gynecologic and general surgery procedures, according to the company. Intuitive also sold more surgical systems during the quarter--150, compared to 129 during the same period in 2011. Subsequently, the company said, its service revenue grew from $68 million to $83 million, a 23% jump, based on the growing installed base of the da Vinci Surgical systems.

Net income for Intuitive reached $155 million or $3.75 per diluted share for the 2011 second-quarter, versus $117 million or $2.91 per diluted share over the 2011 second-quarter. And don't worry about Intuitive's cash reserves. The company says it has $2.6 billion in cash, equivalents and investments on hand, $260 million more than the previous quarter.

- read the release
- check out MassDevice's take

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