UPDATE 1-Intuitive Surgical shows improvement despite profit decline

Tue Jul 22, 2014 5:28pm EDT

(Adds sales details, share move, company comment)

July 22 (Reuters) - Intuitive Surgical Inc on Tuesday said it sold more of its high-priced robot surgical systems in the second quarter than in its dismal first quarter even as the once fast-growing company posted its fifth straight quarterly earnings decline.

Sales of its da Vinci robot surgical systems, which go for about $1.5 million each, fell from a year ago but were up from the prior quarter.

The company sold 96 da Vinci systems in the quarter, down from 143 a year ago but an improvement over the 87 shipped in the first quarter.

Intuitive posted a net profit of $104 million, or $2.77 per share, down from $159.1 million, or $3.90 per share, a year ago.

Revenue for the quarter fell 11 percent to $512.2 million but exceeded Wall Street's diminished expectations of $501.7 million, according to Thomson Reuters I/B/E/S.

Instruments and accessories revenue fell about 1 percent to $262 million, but procedures using da Vinci systems rose about 9 percent, driven by growth in U.S. general surgery and international urologic procedures. Revenue per procedure was about $1,800 for Intuitive.

Based on the better second quarter, the company took up the low end of its full-year procedure forecast and now sees growth of 5 percent to 8 percent. Its prior view was for growth of 2 to 8 percent.

The company declined to provide a full-year revenue forecast as had been its past practice each quarter, citing numerous uncertainties.

Intuitive's volatile shares rose nearly 11 percent to $435 in after hours trading. They have been about flat for the year, but are down more than 20 percent since early July of 2013.

Sunnyvale, California-based Intuitive had enjoyed double-digit revenue growth and steadily rising da Vinci sales in past years. Those trends reversed last year as media reports questioned the cost effectiveness of using the robots for certain procedures. Also contributing to the reversal: uncertainty about capital spending at hospitals, physicians holding off on recommending prostate surgery for slower-progressing cancers and a decline in benign gynecological procedures.

Intuitive Chief Executive Gary Guthart said on a conference call that he was encouraged by several trends relative to the first quarter, but added that he expects constraints on hospital capital spending to continue. (Reporting by Bill Berkrot; Editing by Jonathan Oatis and David Gregorio)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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