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Intuitive Surgical (ISRG) Q4 Earnings & Revenues Top Estimates

Zacks Equity Research
·4-min read

Intuitive Surgical, Inc. ISRG reported fourth-quarter 2021 adjusted earnings per share (EPS) of $1.30, which beat the Zacks Consensus Estimate of $1.28 per share by 1.6%. The bottom line improved 9.2% from the year-ago quarter.

For 2021, adjusted EPS was $4.96, up 45.9% from the previous year. The figure surpassed the consensus mark by 0.4%.

GAAP EPS in the quarter was $1.04, compared with the year-ago quarter’s figure of $1.01 per share.

Revenue Details

The Zacks Rank #2 (Buy) company reported revenues of $1.55 billion, which climbed 17% from the prior-year quarter. Growth in da Vinci procedure volume and system placements contributed to the improvement. The top line outpaced the Zacks Consensus Estimate by 0.8%.

For 2021, the company reported revenues of $5.71 billion, up 31% from the previous year. The figure beat the consensus mark by 0.2%.

Segment Details

Instruments & Accessories

Revenues at the segment totaled $843 million, reflecting a year-over-year improvement of 13%. This can be attributed to a 19% da Vinci procedure volume growth. This was partially offset by stocking orders related to the company’s launch of Extended Use Instruments in the prior year.

Systems

In the reported quarter, System revenues surged 28% year over year to $470 million. The company shipped 385 da Vinci Surgical Systems in the quarter, compared to 326 systems in the prior-year quarter.

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise
Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

Intuitive Surgical, Inc. price-consensus-eps-surprise-chart | Intuitive Surgical, Inc. Quote

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Services

Services revenues were $238 million, up 10.5% from the year-ago quarter.

Outside the United States, revenues totaled $503 million, up 18% on a year-over-year basis.

Outside the United States, Intuitive Surgical placed 150 systems in the fourth quarter compared with 130 in the prior-year quarter. Of these, 63 were in Europe, 37 in Japan and 14 in China.

Margins

Adjusted gross profit in the reported quarter was $1.09 billion, up 17.4% year over year. As a percentage of revenues, the gross margin in the quarter was 68.4%, up 100 basis points (bps).

Selling, general and administrative expenses amounted to $427 million, up 29.3% from the prior-year quarter. Research and development expenses totaled $183.4 million, up 22.4% on a year-over-year basis.

Adjusted operating income totaled $587.9 million, up 9.9% year over year. As a percentage of revenues, operating margin in the quarter was 29%, down 230 bps.

Financial Position

The company exited the fourth quarter with cash, cash equivalents and investments of $8.62 billion, compared with $8.22 billion in the previous quarter.

Total assets were $13.56 billion, compared with $12.93 billion sequentially.

Wrapping Up

Intuitive Surgical ended the fourth quarter on a strong note, wherein both earnings and revenues beat the consensus mark. The company displayed strong segmental performance in the quarter under review. It witnessed growth in da Vinci procedure volume in the fourth quarter. Expansion in gross margin is positive. Overall international sales improved in the fourth quarter.

Per management, COVID-19 resurgence impacted the company’s procedure volume in the fourth quarter. Despite this challenging environment, Intuitive Surgical continued to witness growth in its products in the quarter under review and capital demand remained robust.

However, the contraction in operating margin is disappointing. Also, intense competition in the global MedTech space remains a concern.

Other Key Picks

Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

AMN Healthcare Services, Inc. AMN has an Earnings ESP of +10.29% and a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.

Henry Schein, Inc. HSIC has an Earnings ESP of +2.62% and a Zacks Rank of 2.

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.9% compares favorably with the industry’s 4.1%.

Hologic, Inc. HOLX has an Earnings ESP of +1.56% and a Zacks Rank #2.

Hologic’s long-term earnings growth rate is estimated at 7.4%. The company’s earnings yield of 5.3% compares favorably with the industry’s (4.8%).


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Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report

Hologic, Inc. (HOLX) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

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