Intuitive Surgical dips after hours on Q4 results

January 23, 2015 By Brad Perriello Leave a Comment

Investors pared some value from Intuitive Surgical (NSDQ:ISRG) shares in after-hours trading today on the robot-assisted surgery pioneer’s end-of-year results, despite a Q4 sales-and-earnings beat.

Sunnyvale, Calif.-based Intuitive posted an -11.7% Q4 profit slide to $146.8 million, or $4.92 per share, despite top-line gains of 4.9% to $604.7 million. Adjusted to exclude 1-time items, earnings per share were $4.92, 54¢ ahead of expectations on Wall Street, which was looking for sales of $589.4 million.

But adjusted profits were down 5.1% to $183.5 million during the 3 months ended Dec. 31, compared with Q4 2013, and Intuitive’s full-year comps were down across the board, the company said.

Full-year profits were $418.8 million, a -37.6% decline compared with 2013, on a -4.9% top-line slip to $2.13 billion (which did beat The Street’s forecast of $2.12 billion). But adjusted profits were off -23.7% to $606.9 million, and adjusted EPS of $16.10 missed the analysts’ consensus of $16.73.

A deeper dive shows that Q4 service revenues climbed 6.4% to $110.0 million, but expenses also climbed: Intuitive Surgical’s cost of goods sold rose 18.6% to $211.3 million; R&D spend jumped 13.4% to $47.3 million; and selling, general & administrative expenses were up 8.3% to $160.0 million.

Perhaps most worrying for investors, however, was a Q4 gross margin decline of -5.8% to 65.1%. ISRG shares were down 2.4% to $513.00 apiece today in after-hours activity.

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