Photo Credit: Roswell Park

Intuitive Surgical, Inc. (ISRG) Health Care - Health Care Equipment & Supplies | Reports October 18, After Market Closes

Intuitive Surgical is scheduled to report third quarter earnings tomorrow, after the market closes. For the past 5 quarters, the company has beaten expectations on both the top and bottom line. This is accompanied by double digit growth in 4 for the past 5 quarters. A large portion of these gains can be credited to the success of its flagship product, the da Vinci surgical system. Shares are up 31% year to date with analyst optimistic that tomorrow’s report will beat and drive the stock up even further.

Analysts surveyed at Estimize are calling for earnings per share of $5.31, 1% higher than the same period last year. That estimate has increased 4% since ISRG’s most recent report in July. Revenue for the period is estimated to climb by 11% to $655.79 million, marking a 5th consecutive quarter of double digit revenue growth. On average the company beats the Estimize consensus 63% of the time while trumping Wall Street a resounding 80% of reported quarters. 

Intuitive Surgical has been fortunate to have found success with its da Vinci surgical systems. In each of the past 3 quarters, the company has posted double digit gains on both the top and bottom line. In the second quarter, the number of procedures performed using its flagship system increased by 16% while the number of systems shipped increased to 130 from 118 the year prior. Meanwhile, the number of instruments and accessories sold increased by 14% driven by strong procedure volume. The company makes its biggest margins from accessory sales such as the Xi Vessel Sealer, Xi Firefly and Xi Stapler.

Minimally invasive robotic surgeries are still in their early stages, leaving Intuitive Surgical with a lot room to run. If system wide sales continue to grow at their current pace and Intuitive Surgical can capitalize on global expansion, then sky’s the limit for earnings potential.

The only near term hurdles Intuitive Surgical must overcomes are volatile currency fluctuations, increasing regulatory concerns and low capital investments in hospitals.