* Q2 EPS $1.62 vs expectations of $1.27
* Revenue up 18.8 pct to $260.6 million
* Shares rise 14.3 pct (Adds forecast, analyst comment, background)
By Bill Berkrot
NEW YORK, July 22 (Reuters) - Intuitive Surgical Inc (ISRG.O) reported second-quarter earnings on Wednesday that blew past Wall Street expectations, as instrument and accessories revenue jumped, sending its shares up more than 14 percent.
The maker of the da Vinci robotic surgical system posted a net profit of $62.4 million, or $1.62 per share, compared with a profit of $51.2 million, or $1.28 per share, a year ago.
That topped analysts’ average expectations by a whopping 35 cents, according to Reuters Estimates, and pushed shares to $194.15 in extended trading from their Nasdaq close at $169.79.
“The numbers look outstanding. The company performed dramatically better than expected in both revenues and earnings per share,” said Leerink Swann analyst Rick Wise.
“It clearly suggests that, despite extraordinary challenges, where hospital capital expenditures is under pressure, Intuitive Surgical continues to do amazingly,” said Wise, who added the 76 da Vinci systems sold in the quarter topped his estimate of 68 and the previous quarter’s 66.
That was still down from the 85 sold in the year-ago quarter, reflecting the continued impact of curtailed hospital spending.
Da Vinci systems, which use precision robotics to replace a surgeon’s hand and have a history of excellent patient outcomes in a variety of cancer surgeries, represent a substantial capital expenditure for hospitals. The older model costs about $1.6 million each, while the newer version costs as much as $2.25 million each.
“The results far exceed Street expectation,” said Canaccord Adams analyst Jason Mills, who had been looking for 57 da Vinci systems sold in the quarter.
“They are bucking the trend here, so it’s quite amazing,” he added.
Total revenue rose nearly 19 percent from a year ago to $260.6 million and was up 38 percent from the first quarter. Wall Street was estimating revenue of $230 million.
Revenue for the quarter included $13.8 million deferred from the first quarter in connection with discount offers to customers to upgrade their da Vinci systems, the Sunnyvale, California-based company said.
Instrument and accessories revenue rose to $95.8 million from $73.6 million, driven by 52 percent growth in da Vinci surgical procedures.
The company raised its 2009 procedure growth estimate to 45 percent from its previous forecast of 40 percent growth. It still sees 35 percent growth in service revenue for the year.
“I consider our ability to continue positive growth during the worst worldwide recession in recent memory to be a significant accomplishment,” Chief Executive Lonnie Smith told analysts and investors on a conference call. (Reporting by Bill Berkrot; additional reporting by I-Ching Ng; editing by Richard Chang and Andre Grenon)