Volatile Stock to Watch: Intuitive Surgical, Inc. (NASDAQ: ISRG)

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Intuitive Surgical, Inc. (NASDAQ: ISRG) stock recovered over 1% on October 16th, 2020 (as of 11:12 am GMT-4 ; Source: Google finance) post yesterday’s fall after the company in the third quarter of FY 20 has reported 4% fall in the revenue to $1,078 million compared with $1,128 million in the third quarter of 2019. The decline in the revenue for the period was driven by fewer system placements, mainly due to the significant impact of the COVID-19 pandemic, as well as a $23 million decrease in service revenue related to service fee credits from the previously announced Customer Relief Program. The company has delivered the non-GAAP net income for the third quarter of 2020 to $334 million compared to $409 million in the third quarter of 2019. The Company ended the third quarter of 2020 with $6.4 billion in cash, cash equivalents, and investments, which reflects an increase of $287 million during the quarter, mainly due to cash generated from operations. The company did not repurchase any shares in the third quarter.

Furthermore, the company’s pro forma gross margin for the third quarter of 2020 was 70.2%, compared to 72% for the third quarter of 2019 and 62.4% last quarter. The second quarter of 2020 included higher period costs related with abnormally low production, higher impact of the Customer Relief Program and higher excess in obsolete inventory charges.

Moreover, with regard to global procedures, Q3 2020 procedures rose 7% compared with Q3 2019. Procedure growth had varied widely by country, like U.S. growth was in the mid-single digits and procedure growth in China’s stood out is particularly strong. It increased approximately 36% compared with last quarter. For the third quarter, the company had installed 195 new systems. This is compared to 275 installs in Q3 2019 and 178 installs in Q2 2020. Year-over-year install base growth was 8% at the end of Q3 after accounting for trade-ins. The company has expanded the installed base of da Vinci systems over the last year by 8% to about 5,865 systems. This growth rate is compared to 9% in the last quarter and 13% last year. Utilization of clinical systems in the field measured by procedures per system fell by approximately 2% compared with last year and increased 33% compared with last quarter.

In addition, the Company shipped 195 da Vinci Surgical Systems, which reflects a decrease of 29% compared with 275 in the third quarter of 2019. The Company grew its da Vinci Surgical System installed base to 5,865 systems as of September 30, 2020, which reflects an increase of 8% compared with 5,406 as of the end of the third quarter of 2019.

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