Wednesday, April 20, 2011

Intuitive Surgical Sees International Expansion

My key take from yesterday's Intuitive Surgical (ISRG) Q1 2011 results release and analyst conference call was that the U.S. market for da Vinci surgical robots is no longer the main growth arena. While use of the robots in the U.S. will continue to expand as the FDA approves new types of surgeries to be conducted, and that will drive accessory sales, there are only so many hospitals in the U.S., and many already have at least one robot; a few have as many as six.

That is not true internationally. There is a vast space available for growth as foreign medical regulatory agencies approve the robots and national health services (other insurers) allow for reimbursements.

Q1 is typically a seasonally down quarter as hospitals finish up their capital spending budgets in Q4. The pattern held for Q1 2011. Revenues were $388.1 million, down slightly sequentially from $389.3 million, but up 18% from $328.6 million in the year-earlier quarter.

Net income was $104.1 million, down 14% sequentially from $121.2 million, but up 22% from $85.3 million year-earlier. EPS (earnings per share) were $2.59.

System sales, including upgrades to newer versions of da Vinci, were 120, with 31 sold outside the U.S. and 89 in the U.S.

Research and development continues. The FDA approved a fuorescent imaging system addition to the system. A proposal for vessel sealing surgery has been submitted to the FDA. A surgical stapler remains in late-stage development, as does Single-Site surgery.

For a complete summary, see my notes on the Intuitive Surgical Q1 2011 analyst call.

See also the Intuitive Surgical web site.

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