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What: Shares of robotic surgery system specialist Intuitive Surgical plummeted 18% today after the company's preliminary quarterly results disappointed Wall Street.
So what: The stock has slumped in 2013 on signs of slowing demand for its da Vinci surgical system, and today's downbeat guidance only reinforces those concerns. While overall procedures using the da Vinci system rose a strong 18%, reduced hospital admissions and conservative choices by insurers continue to weigh heavily on sales, forcing analysts to recalibrate their growth estimates yet again.
Now what: Management now sees second-quarter income of $160 million on revenue of $575 million, well below the consensus of $177.7 million and $630.4 million, respectively. "While we are disappointed in our performance this quarter, particularly with respect to our capital sales in the U.S., overall procedure performance was solid in a difficult environment," said CEO Gary Guthart. "We remain confident in the value that our products and services bring to patients, hospitals and the health care system." With the stock hitting a new 52-week low today and trading at a forward P/E of 20, now might even be an opportune time to buy into that turnaround talk.
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The article Why Intuitive Surgical Shares Sank originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical. The Motley Fool owns shares of Intuitive Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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