Tuesday, January 19, 2010

Intuitive Surgical Inc. (NASDAQ: ISRG): Q4 Earnings Preview 2009

. Tuesday, January 19, 2010

By Stock Wizard

Medical device maker Intuitive Surgical Inc. (NASDAQ: ISRG) is scheduled to release financial results for the fourth quarter after the closing bell on Thursday, January 21, 2010. Analysts, on average, expect the company to report earnings of $1.71 per share on revenue of $292.25 million. In the year ago period, the company reported earnings of $1.27 per share on revenue of $231.55 billion. The company has beaten Wall Street estimates in two of the past four reporting periods.

Intuitive Surgical, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of da Vinci surgical systems for use in urologic, gynecologic, cardiothoracic, and general surgeries. Its surgical systems consist of a surgeon's console, a patient-side cart, a vision system, and wristed instruments and surgical accessories. The da Vinci System is a surgical platform designed to enable complex surgery using a minimally invasive approach. The da Vinci System consists of an ergonomic surgeon console, a patient-side cart with four interactive robotic arms, a high-performance vision system and proprietary EndoWrist instruments. The company enjoys monopoly over minimally invasive surgically robotics.

In October, the Sunnyvale, California-based company reported that its third quarter net income rose to $64.52 million, or $1.64 per share, from $57.59 million, or $1.44 per share, in the prior-year quarter. Quarterly net revenues for climbed to $280.13 million from $235.99 million in the year-ago period. Analysts, on average, expected the company to report earnings of $1.48 per share on revenue of $258.23 million. The company sold 86 units of its flagship product Da Vinci systems during the third quarter of 2009, compared with 76 systems last quarter. Though that was five fewer than in the year-ago quarter, 70 of the 86 were the newer, more expensive models. At the end of the third quarter, there were a total of 1,308 da Vinci systems installed worldwide, including 968 in the United States. The average price per system sold in the quarter was nearly $1.4 million.

A new product was developed as an upgrade to its da Vinci Surgical System in the fourth quarter. In November, Intuitive Surgical announced that it has received Japanese regulatory approval to allow marketing of its da Vinci System in Japan.

The company's stock currently trades at a forward P/E (fye 31-Dec-10) of 44.27 and PEG ratio (5 yr expected) of 2.62 and looks undervalued. In terms of stock performance, Intuitive Surgical shares have gained nearly 206% over the past year. The stocks of the company may suffer huge drop if results miss the analyst expectations or management indicates weak hospital spending climate.

Full Disclosure: None.





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