Intuitive Surgical (NSDQ:ISRG) said sales dropped nearly 24% during the first 3 months of 2014, missing analysts’ estimates and sending shares down 4% in after-hours trading.
Sunnyvale, Calif.-based Intuitive had braced The Street earlier this month with a preliminary earnings release that sent shares down 10% April 9 to $440.50 apiece.
Today Intuitive officially reported net income of $44.3 million, or $1.13 per share, on $464.7 million in sales, for a 73.3% bottom-line decline on a 19.4% sales decrease compared with the same period last year. Analysts on The Street had predicted adjusted EPS of $3.26 on sales of $494 million; the news pushed ISRG shares down to $390 each after-hours today, to a 7.7% decline as of about 5:30 p.m.
The company notched a 59% decline in sales of its da Vinci systems, driven by slowing demand in the U.S. System revenues amounted to $106 million for 87 systems, compared with $256 million for 164 systems in Q1 2013.
"Factors that lead to the lower U.S. systems shipments include lower procedure volumes, changing hospital capital-spending priorities associated with the implementation of the Affordable Care Act and the impact that anticipation of a new system may have had on customer capital-spending decisions," the company said in a statement.
Intuitive also attributed the lower revenues in part to a $26 million deferral for the planned "trade-out program" for customers who want to upgrade from older da Vinci Si systems to its new da Vinci Xi platform, which Intuitive launched after receiving FDA clearance early this month. Excluding the impact of the trade-out deferral, revenue would have declined only 20%, according to the release.
The company also recorded a $67 million pre-tax charge associated with "a number of product liability claims" over its recalled surgical scissors and a related tip cover. Intuitive in 2012 pulled early models of monopolar curved scissor tip covers and in 2013 recalled certain versions of the scissors themselves.