Analyst Conference Summary

Intuitive Surgical

conference date: July 22, 2014 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2014 (second quarter, Q2 2014)

Forward-looking statements

Overview: Some sequential improvement in number of systems shipped is nice to see, but still down y/y.

Basic data (GAAP):

Revenue was $512.2 million, up 10% sequentially from $464.7 million but down 11% from $578.5 million in the year-earlier quarter.

Net income was $104.0 million, up 135% sequentially from $44.3 million, and down 35% from $159.1 million year-earlier.

EPS (earnings per share, diluted) were $2.77, up 145% sequentially from $1.13 and and down 29% from $3.90 year-earlier.



Conference Highlights:

Intuitive Surgical shipped 96 da Vinci Surgical Systems, up sequentially from 87, but down from 143 in the year-earlier quarter.

Procedure volume rose 8% sequentially and by 9% y/y.

Revenue from Da Vinci system sales was $144 million, up 36% sequentially from $106 million and down 33% from $216 million in the year-earlier quarter.

Revenue from instruments and accessories was $262 million, up 3% sequentially from $254.8 million and down 1% from $265 million year-earlier.

Revenue from services was $107 million, up 3% sequentially from $103.9 million and up 9% from $98 million year-earlier.

Non-GAAP net income was $140 million, down from $189 million year-earlier. Non-GAAP EPS was $3.73, down from $4.63 year-earlier.

The cash and equivalents balance ended at $2 billion, down $920 million in the quarter. Cash flow from operations was $ million. About $1 billion of cash was used to repurchase shares in the quarter.

Cost of revenue was $167.8 million. Operating expenses of $201.4 million included: $161.2 million for selling, general, and administrative; $40.2 million for research and development. Leaving income from operations of $143.0 million. Other net expense was $0.4 million. Income tax expense $38.6 million.

There was $42 million non-cash stock compensation expense in the quarter.

Believes there are still many opportunities to develop and sell robotic surgery systems and instruments.



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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2014 William P. Meyers