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Can Intuitive Surgical Beat Analyst Estimates Again in 4Q17?

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Earnings announcement and preliminary results

On January 25, 2018, Intuitive Surgical (ISRG) is expected to announce its fiscal 4Q17 and fiscal 2017 earnings results. It has exceeded analysts’ estimates in recent quarters and is expected to post strong results in fiscal 4Q17 as well. The chart below shows a comparison of ISRG’s actual sales results and analysts’ estimates over the past seven quarters.

According to Intuitive Surgical’s preliminary results announced on January 10, 2018, the company is expected to report 4Q17 sales of $892 million, an 18% rise YoY (year-over-year). For fiscal 2017, it’s expected to have a sales growth of 16% to $3.1 billion.In 4Q17, the recurring revenue stream, comprised of instruments and accessories revenues, is expected to be $457 million, an 18% rise YoY. Fiscal 2017 instruments and accessories sales are expected to be $1.6 billion, representing a YoY growth of 17%.

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Wall Street analysts’ estimates

According to Wall Street analysts’ estimates, ISRG is expected to have sales of $860 million in fiscal 4Q17 and $3.1 billion in fiscal 2017. These estimates represent YoY growth estimates of 13.6% and 14.4%, respectively. In fiscal 3Q17, Intuitive Surgical had a sales growth of 18%, which was mainly boosted by its recurring revenue growth, driven by growth in procedure volumes. However, the system sales growth was impacted by higher average selling prices and fewer leasing arrangements.

Major competitors TransEnterix (TRXC), Medtronic (MDT), and Johnson & Johnson (JNJ) are expected to register sales growth of 100%, -1.1%, and 10.9%, respectively, in their most recent quarters.

On the day ISRG announces its earnings results, the PowerShares QQQ (QQQ) could possibly see a stock price movement triggered by the event. ISRG makes up 0.62% of QQQ’s total portfolio.

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