Intuitive Surgical profit rises, but shares slip

posted: 37 DAYS 9 HOURS AGO

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SUNNYVALE, Calif. -Shares of Intuitive Surgical Inc. fell in premarket trading Wednesday, after the company said installations of its da Vinci robotic surgery system decreased in the third quarter.

Late Tuesday, Intuitive said its profit rose 12 percent, to $64.5 million, or $1.64 per share, from $57.6 million, or $1.44 per share. Revenue grew 19 percent to $280.1 million from $236 million, mostly due to improved sales of instruments and accessories.

The third-quarter results also include $6.3 million in deferred revenue. Earlier this year, Intuitive offered customers the option to upgrade their da Vinci S systems and pay later. It has now recorded all the revenue from that offer. The deferred revenue added $3.8 million, or 9 cents per share, to the company's profit.

The result was above Wall Street estimates. Analysts were expecting a profit of $1.48 per share and revenue of $258.2 million, according to Thomson Reuters. But Intuitive shares fell $14.35, or 5.4 percent, to $253.10 from $267.45 in premarket activity.

Da Vinci systems are used in heart surgeries, prostatectomies and hysterectomies, and other procedures. Surgical procedures on da Vinci system rose 49 percent, Intuitive said, but revenue per procedure fell. A total of 86 systems were sold, down from 91 a year ago. A total of 66 new systems were installed, with 20 older systems traded in. Of those 86 systems, 70 were the new da Vinci Si model. The company said 23 older systems were upgraded.

Analyst Tao Levy of Deutsche Bank said da Vinci sales were better than expected, but the high number of trade-ins means Intuitive is not selling as many new systems as it has in the past. Levy said some investors may be disappointed by that result, but he said it is a key step in Intuitive's development, and increasing replacements and upgrades will boost its revenue.

Levy said the third quarter results were "solid," and maintained a "Buy" rating with a price target of $300 per share.

The company had said it expects procedure volume to grow 45 percent in 2009. At the end of the third quarter, Intuitive had installed a total of 1,308 da Vinci systems around the world.

2009-10-21 09:16:50