Intuitive Surgical Expects Hospitals To 'Clamp Down'

 Intuitive Surgical (ISRG) offered a dim view for 2021 as hospitals "clamp down on surgeries" amid the raging pandemic. In response, ISRG stock toppled to a month-low on Friday.

During the fourth quarter, procedures using Intuitive Surgical's robotic surgery system, known as da Vinci, rose 6% overall, the company reported late Thursday. That slowed down from 7% growth in the third quarter, but improved from a 19% dive in the second quarter.

Still, the robotic surgery giant didn't offer a formal outlook for 2021, citing the unpredictable nature of the coronavirus pandemic — and investors hammered ISRG stock.

"Intuitive Surgical is a procedural bellwether, so how Intuitive Surgical sees procedure dynamics shaping up matters for sentiment in the sector," BTIG analyst Ryan Zimmerman said in a report to clients. He has a neutral rating on ISRG stock.

The coronavirus pandemic has impacted various geographies differently, Intuitive Surgical said. That trend is expected to continue, Zimmerman said. He expects first-quarter procedures to be in line to down sequentially.

"Procedure growth in the U.S. and Europe declined as the quarter progressed as Covid resurged," he said. "Nonetheless, bariatrics in the U.S. and new systems installed in China drove procedure growth, such that U.S. procedures landed up 5% year over year and overall procedures landed up 6% year over year."

In total, Intuitive Surgical shipped 326 da Vinci robotic surgery systems, down 3%. That topped the company's expectations. But Zimmerman noted hospitals likely had excess cash to spend at the end of the budget year.

"While hospitals fill this existing capacity and reset budgets against the backdrop of Covid continuing to straight hospital profitability, capital revenue headlines likely continue," he said.

As pre-announced, fourth-quarter sales grew 4% to $1.33 billion. Adjusted earnings were $3.58 a share, up by a dime year over year. Both measures beat the estimate from FactSet for $1.25 billion in sales and profit of $3.12 a share.

https://www.investors.com/news/technology/isrg-stock-intuitive-surgical-earnings-q4-2020/