Unlike the prior quarter, when there was a warning that earnings would miss, this time there was none.
And this report follows multiple months of scrutiny in the legal and medical communities, with concerns about safety and the overzealous marketing of Intuitive's da Vinci surgical robot.
In a note to clients today, Northland Capital's Suraj Kalia, a longtime Intuitive bear, put it bluntly: "It seems that there is a market correction in progress for the over-proliferation of robotic surgery."
He added, "The company is doing whatever it can to stem the bleeding. However, macro-level headwinds are significant and expectations need to be recalibrated, in our view."
While your view of the bottom line depends on the tax impact, the story is in revenue, which didn't just fall off the wagon but a cliff -- sliding 7.2% after the prior quarter's 7.8% rise, which itself was a big tumble from the prior quarter's 23.5% gain.
Drilling down further, and perhaps most disconcerting was a big disappointment in system sales. System sales are supposed to drive high-margin instrument sales, and for the rest of the year the company lowered the top-end of guidance for system sales. Revenue per procedures also fell, prompting Kalia to say that he believes "there is at least 50% unused capacity in da Vinci's in the United States."
Among the concerns, which I included in my CNBC.com documentary last April, "The da Vinci Debate", was that Intuitive was overly aggressive in the way it marketed its machines to hospitals and even patients.
Concerns about safety have also been raised by at least one major medical group, the American College of Gynecology, whose president warned in a letter last March that "aggressive direct-to-consumer marketing of the latest medical technologies may mislead the public into believing that they are the best choice."
As it turns out, among the big shortfalls in recent quarters have been benign hysterectomies, which have also been the focus numerous lawsuits.
Speaking on the company's earnings call, CEO Gary Guthart said, "The safety profile of da Vinci is outstanding when it's compared with the surgical alternatives that people have."
That may be, but the bigger question: As hospitals reassess their commitment to robotics, is this the beginning or end of the reset?
Reality: Robotic surgery isn't going away. It represents a genuine advancement in visualization and precision for certain procedures. With its two biggest procedures -- prostatectomies and hysterectomies -- now on the wane, Intuitive is making a strong push into general surgery. It's unclear how successful that will be.
If I've learned anything in watching this company over the years its never to underestimate how surgeons will adopt robotics or anything else. The difference this time is that in the past, as the company was expanding, it was not under the kind of scrutiny it now is.
How that ultimately shakes out remains to be seen, but keep this in mind: Some analysts continue to believe this is a blip on a stock headed to $500. Kuria, who has been the most on target with his forecast, has sliced his target to $275 from $370. As we know in this market, both can be right.
-- Written by Herb Greenberg in San Diego