Intuitive Surgical fourth-quarter profit tops expectations

(Reuters) - Intuitive Surgical Inc ISRG.O on Thursday reported fourth-quarter profit that sailed past Wall Street estimates as it sold more da Vinci surgical robots and saw a big increase in international procedures using the high-priced systems.

However, the company cautioned that first quarter sales were likely to be lower than the just-reported quarter, and said it expects business outside the United States to be uneven this year for a variety of reasons, including markets constrained by government regulations.

Excluding one-time items, Intuitive said it earned $5.89 per share, topping analysts’ average expectations by 85 cents, according to Thomson Reuters I/B/E/S.

Despite preannouncing some results last week, “Intuitive Surgical still managed to surprise us on the upside with a massive EPS beat driven by gross margin improvements and impressive operating leverage,” Evercore ISI analyst Vijay Kumar said in a research note.

Gross margin improvement was helped by suspension of the medical device tax.

Net profit for the quarter rose to $190 million, or $4.99 per share, from $147 million, or $3.94 per share, in the year-ago period.

The quarterly results were buoyed by expanded use of its robots for general surgery procedures such as hernia repair, that helped offset slow growth in gynecological business, and a 27 percent jump in international procedures.

Average revenue per procedure was $1,840, the company said.

The company said last week it expects procedures using da Vinci robots to increase 9 percent to 12 percent in 2016.

Intuitive also previously reported fourth-quarter revenue of $677 million, and said it sold 158 da Vinci systems at an average cost of about $1.5 million, up from 137 units sold in the year-ago quarter and 117 in the prior quarter.

The company said on a conference call with analysts and investors that it does not expect the impact of foreign exchange to be as pronounced this year as it was in 2015, when the strength of the dollar hurt overseas sales.

Intuitive said U.S. health regulators have cleared use of the company’s movable surgical table to be used in conjunction with the da Vinci system, which allows for repositioning of the patient to better assist in robotic surgical procedures.

Intuitive shares were up nearly 1 percent at $559.90 in extended trading from their Nasdaq close at $555.60.

Reporting by Bill Berkrot; Editing by Cynthia Osterman and Tom Brown