In its preliminary second-quarter results, released late on Monday, the surgical robotics specialist said it expects revenue to increase 7% year-over-year to $537 million. This growth rate, however, will be down dramatically from 23% in the prior quarter.
The results pushed Intuitive's shares southward in Tuesday trading, ending the session down 16.15% at $419.30.
Wall Street was clearly unimpressed with the company's second-quarter revenue number. Analysts with JMP Securities had expected sales revenue to be between $623 million and $629 million.Intuitive's report will be the worst since the third quarter of 2009, according to Canaccord Genuity. "Intuitive Surgical had reported system sales growth greater than 15% for 9 consecutive quarters" wrote Canaccord analysts. A slowdown in sales of Intuitive's Da Vinci system weighed on the company's second-quarter numbers. The Sunnyvale, Calif.-based firm expects its Da Vinci revenue to decrease 6% to $215 million compared to the prior year's quarter. Intuitive sold a total of 143 Da Vinci systems during the second quarter, including 90 in the U.S., down from 150 and 124, respectively, in the same period last year. In a statement, the company blamed the U.S. decline on a number of factors. These include increased economic pressure on hospitals, which caused some customers to defer their purchases, and a slowdown in medical procedures. "Healthcare reform uncertainty and weak procedure volumes are placing increased pressure on purchasing, elongating decision timelines, and driving year over year declines in equipment provider revenue," Goldman Sachs analysts wrote in a report released on Tuesday. Goldman Sachs believe that procedures were delayed as surgeons waited for the newest models of the Endowrist Monopolar Curved Scissors that are more resistant to microcracking. Canaccord, JMP Securities and Goldman Sachs downgraded the equity due to the quarterly report. JMP analysts lowered their 2013 expectations to $2.4 billion from $2.6 billion. The consensus is predicting $2.58 billion for this year. Price targets range from $440 and $500. -- Written by Robert Arenella in New York >To contact the writer of this article, click here: Robert Arenella.
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