A Science Fiction Business Making Investors Real Money

Surgical robots sound like they come straight from the pages of a science-fiction novel. However, luckily for patients around the world, this revolutionary technology is not only possible, it’s becoming more and more integrated into everyday hospital use, and more importantly for us, one leading company in this industry is making investors money hand over fist…

Founded in 1995 and headquartered in Sunnyvale, CA, Intuitive Surgical, Inc. (ISRG) designs, manufactures, and markets the da Vinci surgical system, as well as related instruments and accessories. The da Vinci Surgical System translates a surgeon’s natural hand movements, which are performed on instrument controls at a console into corresponding micro-movements of instruments positioned inside the patient through small incisions or ports.

Intuitive Surgical’s system includes surgeon’s consoles, patient-side carts, 3-D vision systems, da Vinci skills simulators and Firefly fluorescence imaging products that enable surgeons to perform various surgical procedures, including gynecologic, urologic, cardiothoracic and head and neck surgical procedures.

In addition, Intuitive Surgical offers da Vinci single-site instruments and accessories that allow da Vinci surgical systems to work through a single incision. The company also sells various accessory products, including replacement 3-D stereo endoscopes, camera heads, light guides and other items that facilitate doctors’ and surgeons’ use of the system.

But what’s most important for us today is that after the stock market closed yesterday, Intuitive Surgical released earnings and sales results for its first quarter in fiscal year 2018…

Thanks to rising demand for the company’s da Vinci surgical systems, Intuitive Surgical sold 185 surgical robots during the quarter, exceeding expectations for sales of 144 robots. This also topped the company’s sale of 133 robots in the first quarter of fiscal year 2017 by 39%.

Non-GAAP net income jumped 46% year-over-year to $288 million, or $2.44 per share, up from $197 million, or $1.71 per share, in the first quarter of 2017. Analysts were expecting $2.09 per share, so Intuitive Surgical posted a 16.8% earnings surprise. First-quarter sales increased 25% year-over-year to $847.5 million, topping analysts’ estimates for $783.28 million by 8.2%.

Given the strong robot sales, positive earnings report and the company’s continued focus on getting their minimally invasive systems into hospitals, ISRG shares were up more than 4% in after-hours trading yesterday. Moreover, given ISRG’s solid Buy rating in Portfolio Grader, the company remains a good buy for my Blue Chip Growth members on dips.

Until Tomorrow,

Louis Navellier

Louis Navellier

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