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What to Expect from Intuitive Surgical's 2Q16 Earnings

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Part 2
What to Expect from Intuitive Surgical's 2Q16 Earnings PART 2 OF 3

2Q16 Revenue Estimates for Intuitive Surgical

Intuitive Surgical’s revenue estimates

On July 19, 2016, Intuitive Surgical (ISRG) will announce its 2Q16 earnings. Wall Street has estimated the company’s 2Q16 revenues will come in at ~$640 million, which represents a rise of ~12% on a YoY (year-over-year) basis.

2Q16 Revenue Estimates for Intuitive Surgical

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The above graph compares analysts’ estimates for Intuitive Surgical and the company’s actual reported revenues in the previous quarters. In 1Q16, Intuitive Surgical reported revenues of ~$595 million. The company’s actual revenues exceeded analysts’ expectations largely due to the strong sales of its da Vinci Surgical System driven by procedural growth. Moreover, the growth in hernia repair and general surgery also contributed significantly to the company’s performance in 1Q16.

Approximately 75% of the company’s 1Q16 revenues were generated through the company’s recurring revenue stream from instrument and accessory sales. In 2Q16, Intuitive Surgical expects to witness increased revenues driven by its leading position in the robotic surgery market and its new product launches. The company’s diverse customer profile, expanding international presence, and strong growth in international market revenues are some of the other major factors impacting its performance.

Major competitors

Among Intuitive Surgical’s major competitors, Medtronic (MDT) and Johnson & Johnson (JNJ) registered YoY revenue growth of 3.6% and 0.6%, respectively, in their recent quarters.

TransEnterix (TRXC) is one of Intuitive Surgical’s major competitors in the robotics surgery market and poses a potential competitive threat to the company, as its SurgiBot system awaits clearance from the FDA. SurgiBot is expected to be offered at a lower price than Intuitive Surgical’s da Vinci Surgical System.

Investors seeking diversified exposure to Intuitive Surgical can consider investing in the iShares Russell Mid-Cap ETF (IWR). ISRG accounts for ~0.43% of the total holdings of IWR.

In the next article in this series, we’ll discuss Intuitive Surgical’s 2Q16 earnings estimates.

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