Profit down 12% at Intuitive Surgical, but procedure volume up due to strength abroad and in general surgery

Intuitive Surgical's da Vinci surgical system--Courtesy of Intuitive

Procedures conducted using Intuitive Surgical's ($ISRG) da Vinci robot rose 10% in 2014, on the back of strong growth in general surgery, CEO Gary Guthart said during the company's fourth quarter earnings call.

"General surgery growth was approximately 33% for the year, comprised of strong growth in da Vinci colorectal surgery, hernia repair, and in other general surgery procedures, offset by slowing da Vinci Single-Site use in cholecystectomy," he said.

Last year, the company shipped 431 surgical systems, down from 546 in 2013. It posted annual revenue of $2.1 billion, a 6% decrease from 2013. But recurring revenue rose 5% to $1.57 billion. Operating profit was $819 million before non-cash stock option expense, down 21% for the year.

Still, Wall Street has been bullish on the future prospects of the company's Da Vinci robotic surgery device, a section of the market which the company has helped to define. The stock rose 36% last year, making it one of med tech's strongest performers, but it wasn't a smooth ride due to a spate of safety concerns that sent the stock tumbling in April and May.

In the fourth quarter, net income fell 12% year-over-year to $146.8 million. The stock fell by about 2% in after-hours trading prior to today's market open and stands at $513.

During the quarter, procedure volume grew 21% outside the U.S. year over year, and 14% from Q3, the company said.

Last year, the company launched the da Vinci Xi, as well as a number of related instruments and accessories. "In 2015, we plan to submit a 510(k) for software that allows for coordinated table motion with the Xi and a 510(k) for a Xi-compatible version of our single-site instruments. This filling out of the Xi product suite will increase the applicability of the platform to institutions interested in owning a single da Vinci system," Guthart said.

The company added an additional charge of $5.4 million in Q4 to reflect the estimated cost of settling product liability claims against the company, on top of charges of $67 million in Q1 and $10 million in Q2.

- download the earnings release (PDF)

Special Report: Top 10 med tech market movers in 2014 - Intuitive Surgical

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