Intuitive Surgical First Quarter Earnings Miss Street Views

Intuitive Surgical (ISRG), a provider of minimally invasive care and robotic-assisted surgery, reported late on Thursday first-quarter earnings and revenue that missed analysts’ expectations despite growing year onyear.

The firm said in a statement that its revenue rose to $973.7 million during the three months that ended March 31, from $847.5 million a year ago, driven by increased procedures and systems placements. But that result missed the $975.3 analyst estimate compiled by Capital IQ.

Intuitive Surgical said the number of surgical systems it had shipped in the first quarter jumped by 27% along with an increase in the installed base to 5,114 systems from 4,528 in the prior year period.

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This growth in sales has, however, come at a cost, with the company noting “SBC [shares-based compensation] has been and will continue to be for the foreseeable future a significant recurring expense in the company’s business.” While the total cost of revenue jumped to $304.1 million during the period under review, from $253.7 million a year ago, the company’s results show that total operating expenses climbed to $417.4 million from $317.1 million.

Those higher expenses, including a surge in research and development, contributed to Intuitive Surgical missing the market consensus on adjusted earnings per share, which at $2.61 in the first quarter were higher than $2.44 reported a year ago but still fell short of the $2.70 Capital IQ forecast.

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“We are pleased with our first quarter procedure and da Vinci system placements,” Chief Executive Officer Gary Guthart said in the statement. “Our teams continue to work closely with hospitals, physicians and their care teams in pursuit of lowering the total cost of care.”