Intuitive Surgical Shares Tank On Q1 Outlook - Update

(RTTNews) - Intuitive Surgical Inc (ISRG) Tuesday said it expects revenues for the first quarter to drop 24 percent and miss Wall Street estimates, due to lower number of da Vinci Surgical System shipments. The surgical systems maker also anticipates to record a charge of $67 million for settling product liability legal claims. Following the news, the company's stock plunged ten percent in after-hours trading on the Nasdaq.

Sunnyvale, California-based Intuitive Surgical now expects first-quarter revenues to be about $465 million, down 24 percent from $611 million last year. Analysts polled by Thomson Reuters had a consensus revenue estimate of $537.9 million.

First-quarter instruments and accessories revenues are expected to decline around 2 percent to about $255 million, while da Vinci Surgical Systems revenues are anticipated to drop 59 percent to about $106 million, due to lower number of da Vinci Surgical Systems sales. Intuitive Surgical shipped 87 systems in the first quarter, compared to 164 during last year.

The company also said it expects $26 million of revenue deferrals in the first quarter associated with offers made to customers to trade in their recently purchased da VinciSi Surgical Systems for its recently announced da Vinci Xi Surgical System.

Intuitive Surgical makes the da Vinci Surgical System, a line of robotic surgical equipment used to conduct cardiac, urological and cancer related minimally-invasive surgeries.

The company expects to record a pre-tax charge of $67 million to reflect estimated costs of settling a number of product liability legal claims against the company.

The claims are related to alleged complications from surgeries performed with certain versions of Monopolar Curved Scissors or MCS instruments that were the subject of a recall in 2013 and with a first-generation MCS tip cover that was the subject of a market withdrawal in 2012.

Intuitive Surgical stock closed Tuesday at $489.84, down $7.19 or 1.45%, on the Nasdaq. In after hours, the stock further slipped $48.33 or 9.87%.