Intuitive Surgical (NASDAQ:ISRG), the global leader in robotic-assisted minimally invasive surgery, is set to release the earnings results on Thursday, April 16.
In the last few quarters the company reported earnings well below analysts’ estimates and its stock had been punished severely for the same. For instance, according to Reuters Estimates, analysts were expecting the company to report revenue of $252.38 million for the fourth quarter 2008; and revenue of $896 million for fiscal 2008. However, the company reported revenue of $231.54 million for the fourth quarter 2008; and revenue of $875 million for fiscal 2008. In the last quarter of 2008, the company’s stock value fell by a significant 47.3%. The trend continued in the first quarter of 2009 as well with the stock losing 24.9% of its value.
On February 12, 2009, Intuitive Surgical reaffirmed fiscal 2009 guidance for revenue to grow overall by 15%. The company announced that its operating income could grow by 7% to 8%, even after including the impact of the noncash expenses of about $93 million (expected in stock option expense) and $14 million in amortized purchase technology.
The company expects to report earnings per share (EPS) in the range of $5.30 to $5.40 for fiscal 2009. In February 2009, according to Reuters Estimates, analysts were expecting the company to report EBIT of $324 million and EPS of $5.20 for fiscal 2009. However, as of April 9, 2009, the consensus analysts’ estimate is down to an EPS of $4.97 for fiscal 2009. The downward revision was due to the financial troubles at hospitals which is hurting Intuitive Surgical’s sales.
Leerink Swann's analyst Rick Wise downgraded Intuitive's once high-flying stock to market perform from outperform Tuesday amid signs this could be a long-term problem. He said in a note to investors that repeated conversations with hospital CFOs lead indicated that the challenges in hospital capital spending could persist into 2010.
The first signs of real trouble faced by the company were noticed on April 18, 2008, when the stock lost 16.9% value over the previous day. At that time, GE reported that its medical products division was hurting because hospitals were being hit by the financial crisis.
