Intuitive Surgical slumps on weak 2Q forecast
NEW YORK (AP) — Robotic surgery system maker Intuitive Surgical Inc. forecast disappointing second-quarter sales on Monday, saying reduced hospital admissions and conservative management choices by insurers hurt its business.
The Sunnyvale, Calif., company said some hospitals held off on purchases of its da Vinci robotic surgical system because of economic pressure and other issues. Sales of the da Vinci system fell compared to last year, and the use of the system in benign gynecology procedures slowed down because of reduced hospital admissions and more conservative decisions by health care payers regarding outpatient procedures.
Shares of Intuitive Surgical dropped $54.08, or 1.8 percent, to $446 in aftermarket trading.
Intuitive Surgical said it expects to report net income of about $160 million for the quarter ended in June, up 3 percent from the year-ago quarter. Revenue is expected to grow 6 percent to $575 million.
Analysts, on average, expect net income of $177.7 million and $630.4 million in revenue, according to FactSet. On a per-share basis, analysts project income of $4.29 per share.
The company said total da Vinci surgical procedures rose 18 percent on strong growth in use of the systems in general surgeries. In recent months some experts have questioned the use of da Vinci systems in routine hysterectomy procedures, saying the procedures are more expensive but don't improve outcomes for patients. In late February, the Food and Drug Administration also announced a probe into the da Vinci system.
The company said it sold 143 systems during the second quarter, down from 150 a year ago, and revenue from surgical system sales fell 6 percent to $215 million. Intuitive said its revenue from instruments and accessories grew about 18 percent to $265 million, and service revenue grew about 14 percent to $95 million.
Intuitive Surgical is scheduled to report its quarterly results July 18. The company's shares closed Monday's regular session down $3.93 at $500.08.That's up about 2 percent since the start of the year.