Intuitive Surgical ($ISRG) beat expectations and raised guidance in its third quarter earnings report. Its momentum is due to its success in expanding into general surgery, particularly hernia repair, as well as strong international growth. Wall Street rewarded the robotic surgery giant with an 8% uptick on the news to give it a market cap of almost $19 billion.
The company reported a 15% increase in surgical procedures using its systems during the third quarter. That was above the Street's expectation of 12%. In addition, the company raised its 2015 procedure growth guidance to 13% to 14% from 11% to 13% above the roughly 570,000 procedures performed in 2014.
The da Vinci system started out focused on surgeries in urology and gynecology; Intuitive has more recently expanded into general surgery indications including hernia repair, colorectal procedures and cholecystectomies.
|Intuitive Surgical CEO Gary Guthart|
"For 2015, we remain focused on expanding the application of da Vinci and general surgery, particularly colorectal surgery and hernia repair, filling out our product line for da Vinci Xi and launching in key markets globally, developing our organizational capabilities in markets in Europe and Asia, advancing our technologies to improve surgery and lowering our direct product cost," summed up Intuitive President and CEO Gary Guthart on the earnings call.
Revenue in the third quarter grew about 7% from the same quarter a year earlier to $590 million. Most of that, $298 million, came from instruments and accessories (which was up 9%), while systems contributed $174 million (up 3%) and services accounted for $117 million (up 8%). The company shipped 117 of its da Vinci Surgical Systems in the third quarter, up a bit from 111 during the same period a year ago.
The number of international procedures was up about 28% last quarter, compared to only about 12% in the U.S.
"International procedure growth was led by global adoption of da Vinic prostatectomy, with solid contributions from kidney procedures, malignant hysterectomies, colorectal resections," explained Intuitive Senior Director of Finance and Sales Operations Patrick Clingan on the call. "Procedure growth in Europe remains steady through the first nine months of the year, while the acceleration in procedure growth in Asia that began during the first half of the year continued into the third quarter."
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