(Updates with comments from CEO in seventh paragraph.)
Jan. 14 (Bloomberg) -- Intuitive Surgical Inc., the maker of a $1.5 million robotic-surgery device, gained after the company’s preliminary fourth-quarter revenue topped analysts’ estimates.
Intuitive shares increased 6.8 percent to $419.88 at the close in New York. Quarterly revenue was about $576 million, the Sunnyvale, California-based company said today in a statement. That beat the $549.1 million average of 18 analysts’ estimates compiled by Bloomberg.
The shares dropped 22 percent last year, amid questions about the safety of Intuitive’s da Vinci robot and the company’s marketing and training practices. While sales of the machines fell in the quarter, revenue for its instruments and accessories rose 6 percent as more of the robotic procedures were performed, the company said.
“Expectations were for a soft quarter, so the strong fourth-quarter beat appears more than adequate,” Tycho Peterson, a JPMorgan Chase & Co. analyst, said in a note to clients that cited Intuitive’s “better-than-expected system placements.”
Total fourth-quarter revenue declined about 5 percent from a year earlier, Intuitive said.
Da Vinci sales largely took a hit in the U.S., driven by a decline in gynecological procedures and a change in hospital capital spending priorities due to health care reform, known as Obamacare.
The cost pressures are likely to persist for awhile, said Chief Executive Officer Gary Guthart at the JPMorgan Chase & Co. health-care conference in San Francisco.
“The uncertainties with regard to the implementation of the Affordable Care Act, the number of new cases coming in with new insurance coverage and what the payment reforms will mean in terms of revenue have put some uncertainty particularly into the capital acquisition cycle for our customers,” Guthart said. “As we’ve seen in the last few quarters, we suspect or expect that uncertainty will persist until the ACA starts to settle out in terms of hospitals’ ability to predict their revenues.”
The company said it had higher sales outside the country, particularly in Japan.
Full fourth-quarter results are scheduled to be released on Jan. 23, Intuitive said in the statement.
--With assistance from Robert Langreth in New York and Michelle Fay Cortez in San Francisco. Editors: Angela Zimm, Andrew Pollack