The shares of Intuitive Surgical fell through the afternoon. Analysts missed forecasts for sales and earnings last night.
Wall Street had predicted that the company would earn $1.19 per share, pro forma, on $1.56 billion in sales for the second quarter of its fiscal year. The company's sales were just 1.52 billion.
The installed base of da Vinci surgical-assistrobots was up in the second quarter, and procedures performed using them grew. That is a positive start. Revenue from the sale of instruments and accessories grew 12%.
The pace of expansion seems to have slowed in this particular quarter, as the sales of da Vincis to hospitals in the second quarter were 15% less than a year ago. Sales growth was slower than a year ago. GAAP profits fell 40% to just $0.85 per share.
Gary Guthart, the company's CEO, warned that the Pandemic continues to depress procedure volumes at the company. According to comments reported on TheFly.com, Guthart said that supply chain issues are interfering with production and delivery of medical robots, which could affect sales in the second quarter.
The good news is that, despite these trends, the procedure growth will accelerate later this year, so that full-year growth could be as high as 16.5%.
Hospitals appear to be keeping a tight rein on spending, which could impact sales in the future. The situation is not settled.
It's hard to justify a valuation of 56 times trailing earnings for a company with uncertain growth. With long-term growth forecast to remain below 10% over the next five years, I don't think it's a good time to invest in the stock.
Rich Smith has no position in any of them. There are positions in and recommendations forIntuitive Surgical. There's a disclosure policy at the Motley Fool.
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