The embattled company posted a modest gains for the full year, but revenues and profits took a hit in the 4th quarter. Adjusted per-share earnings for the full year came in at $15.88, in line with its preliminary report, released earlier this month.
ISRG shares, which were flat at the close of the market, dropped 4.5% to $419.20 as of about $5.05 p.m. EST.
Q4 net sales dropped 5.4% and profits sank 5%, according to Intuitive’s earnings report. Instruments and accessories sales jumped 6% and da Vinci procedures grew 12%, but systems revenue dropped 23%, which the company attributed to "moderating growth in benign gynecology, combined with changing hospital capital spending priorities associated with the implementation of the Affordable Care Act."
Intuitive reported profits of $166.2 million, or $4.28 per diluted share, on sales of $576.2 million during the 3 months ended Dec. 31, 2013. That compared with profits of $174.9 million, or $4.25 per share, during the same period the previous year.
Figures for the full year showed modest growth, with sales up 4% and profits up 2.2% compared with 2012. The company posted profits of $671 million, or $16.73 per diluted share, on sales of $2.27 billion for 2013, compared with profits of $656 million, or $15.98 per share, on sales of $2.18 billion the year prior.
President & CEO Gary Guthart ceded that 2013 was a tough year, but projected optimism for the year ahead.
"While 2013 has been a challenging year, our teams are well positioned heading into 2014 and deeply committed to our mission of improving surgery for those who need it," Guthart said in prepared remarks. "For 2014, we are focused on expanding use of da Vinci in general surgery, particularly colorectal surgery and single-incision surgery, supporting worldwide gynecology and urology growth, broadening our stapling and Single-Site launches, and continuing to strengthen our capabilities in international markets, particularly Europe and Japan."
The company faced some strong headwinds during the last year and is still battling a barrage of bad press over surgical complications associated with its da Vinci robot-assisted surgical system.
Guthart this month defended the company’s da Vinci robot-assisted surgical system, saying that the "vigorous" public debate over the risks and adverse events has played a big part in the company’s deceleration over the past couple of quarters.
Guthart told an audience at the J.P. Morgan Healthcare conference earlier this month that, despite the increase in adverse events associated with the system, da Vinci surgery is still far safer than open surgery, even for physicians who are using the system for the 1st time.
Intuitive has been under a microscope in recent months as patient injury lawsuits have helped to spur a flurry of adverse event reports tied to the da Vinci system. Growing complaints have drawn the ire of some activist investors and prompted a lot of media attention, despite Intuitive’s claims that adverse events have been in decline compared with growing utilization of the technology.
Some studies have criticized da Vinci procedures as a costlier type of minimally invasive surgery that confers little benefits over laparoscopic procedures. A study published earlier this year found that robotic surgery complications may be under-reported and therefore less safe than they appear, a conclusion Intuitive called "misleading." Studies published last year raised similar concerns regarding robotic surgery prostatectomies and robotic surgeries to treat endometrial cancer.