ISRG shares have ranged from a high of $586.67 to a low of $357.02 over the last 52 weeks, and were trading at $365.00 as of about 10:25 a.m. today.
Wall Street retreated from ISRG after the company released lower-than expected Q2 earnings and lowered its forecast for the year, driven primarily by slipping procedural and equipment revenues in the U.S.
"Capital sales fell 5% from the prior year with the shortfall concentrated in the U.S.," president & CEO Gary Guthart said during a conference call with investors yesterday. "We attribute this primarily to slower than expected da Vinci benign gynecology procedure growth in the U.S."
Revenues from general surgery continued to grow, particularly in single-site cholecystectomy and colon and rectal resections, urologic procedures were "stable," and da Vinci hysterectomy (dVH) for malignant conditions was "solid," Guthart said, but dVH for benign conditions "grew more slowly than expected."
"There appear to be a couple of underlying causes for slower than expected U.S. benign dVH growth," Guthart said. "Overall admissions for benign gynecology appear to be under pressure in the 1st half of 2013; since we are a significant share of hysterectomy, our growth rate in dVH is sensitive to these admissions."
Sluggish benign dVH growth dragged down capital equipment sales as well, Guthart said. Intuitive sold 90 da Vinci systems in the U.S. in Q2 2013, 34 fewer than during the same period last year.
Intuitive sold 34 fewer da Vinci systems in Q2 2013 compared with the same period in 2012, which Guthart attributed to the sluggish benign dVH growth.
"Looking towards the 2nd half of the year, we see increasing pressure on U.S. system sales," he added.
The medical device maker faced some "negative press" in the 2nd quarter, with an FDA report accusing the company of failing to report injuries and warnings to customers, a class action shareholder lawsuit accusing Intuitive and its leadership of fraudulently inflating stock prices, a crack warning for certain of its EndoWrist surgical scissors and the high-profile patient injury lawsuit attacking Intuitive’s training and promotional practices.
Non-U.S. revenues have shown strong growth, but the drag in the U.S. led the company to lower its expectations for the remainder of the year.
The company lowered its procedural revenue growth from expectations in the range of 20%-23%, now expecting growth in the range of 15%-18%. Together with sluggish sales for the da Vinci surgical system, Intuitive predicted total revenue growth at a flat 7% this year.
Non-U.S. sales were up 56% to $158 million during Q2, CFO Marshall Mohr, said during a conference call with investors this week.
"Taken globally, overall procedure performance in the quarter was solid rising 18% over prior year in the face of several headwinds," Guthart noted.