Intuitive Surgical Inc (ISRG.O) on Thursday narrowed its 2013 forecasts for growth of revenue and procedures using its da Vinci surgical robots rather than raising them as it often does when reporting quarterly results, and its shares fell.
Intuitive said it expects 2013 procedure growth to come in at the lower end of its previous forecast of 20 percent to 23 percent and said it sees revenue growth coming in at the higher end of its initial view of 16 percent to 19 percent.
The company reported higher-than-expected first-quarter profit on increased sales of the high priced da Vinci surgical systems.
Investors have become accustomed to Intuitive raising its forecasts over the course of the year. Intuitive's shares were down 4.3 percent to $472 in after-hours trading.
"The Street got used to this massive growth in procedures and revenue every year and it's only a matter of time before that growth really decelerates," said Alex Morozov, an analyst with Morningstar.
"The penetration of the U.S. market is becoming quite high, and it's going to be tougher and tougher for Intuitive to add another robot to a facility that might already have two."
The company said it has seen a slowdown in benign hysterectomies performed with da Vinci systems, driving procedure growth toward the low end of its expectations for the quarter at 18 percent.
Intuitive management, on a call with analysts, said it did not believe the slowdown was due to recent media reports questioning the cost effectiveness of expensive da Vinci procedures and insisted that shorter hospital stays more than offset the additional expense.
Intuitive posted a net profit of $189 million, or $4.56 per share, compared with a profit of $144 million, or $3.50 per share, a year earlier. That topped analysts' average expectations by 58 cents a share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 23 percent to $611 million, exceeding Wall Street estimates of $582.8 million.
Instruments and accessories revenue rose 26 percent to $261 million and systems revenue was $256 million, as the company sold 164 da Vinci systems in the quarter - 75 to repeat customers - at a cost of about $1.55 million each.
The 164 systems sold was up from 140 a year ago, but down from 175 in the previous quarter.
One bright spot was Japan where Intuitive placed 25 da Vincis, up from 10 in the previous quarter. Japan is seen as an important growth opportunity for the company as it gains reimbursements for additional procedures there.
"Among all the mature Western markets Japan is probably the least penetrated at this point by da Vinci and it does present a pretty decent opportunity," Morozov said.
Intuitive said it has seen solid growth in general surgeries using da Vinci, including colorectal resections and colon cancer operations.
It said the decline in U.S. prostatectomies, which had long been the company's bread and butter, was flattening out. They were down 11 percent from a year ago, but up 4 percent from the previous quarter.
Declines in prostate surgeries have been primarily due to changes in screening and treatment for prostate cancer, with many doctors recommending putting off surgery for slow growing cancers in a strategy known as watchful waiting.
(Reporting by Bill Berkrot; Editing by Gary Hill and Kenneth Barry)