Intuitive’s settlement charge reduces profit as revenue grows
Intuitive increased third-quarter revenue to 3.05 billion dollars as use of its robotic surgery systems expanded. Reported net income fell to 523 million dollars after a 450 million dollar pretax antitrust settlement charge. Adjusted earnings rose. The agreement includes a monetary payment and injunctive relief and still requires court approval.
Economics & Markets··Morning
Settlement expense reduces reported earnings
Intuitive Surgical, which makes robotic surgery systems, included an antitrust litigation settlement charge in its third-quarter earnings. It announced the quarterly results on October 20.[1], [2]
Revenue increased 22 per cent from 2.51 billion dollars to 3.05 billion dollars. Reported net income fell from 704 million dollars to 523 million dollars, and diluted earnings per share declined from 1.95 dollars to 1.49 dollars. The 450 million dollar pretax settlement charge reduced earnings by 347 million dollars after tax, equivalent to 0.99 dollars per share.[1]
The agreement still needs court approval
Intuitive reached the written agreement in October. It includes a monetary payment and injunctive relief, and the company said it admitted no liability. Preliminary and final court approvals are still required, with approval not assured. Adjusted net income, which excludes the settlement expense, increased from 867 million dollars to 1.05 billion dollars. Adjusted diluted earnings per share rose from 2.40 dollars to 3.00 dollars. Tariff refunds contributed 22 million dollars to net income, or 0.06 dollars per share.[1]
More procedures and systems support revenue
Procedures using da Vinci, Intuitive’s robotic surgery system, rose about 14 per cent. Procedures using its Ion system increased about 31 per cent. Instruments and accessories revenue grew 18 per cent from 1.52 billion dollars to 1.80 billion dollars. Systems revenue increased from 590 million dollars to 769 million dollars. Intuitive placed 546 da Vinci systems, up from 427, including 315 da Vinci 5 systems compared with 240 a year earlier.[1]
The company repurchased 7.8 million shares for 2.94 billion dollars. Cash, cash equivalents and investments fell by 1.83 billion dollars during the quarter to 6.80 billion dollars as repurchases and capital spending exceeded operating cash generation.[1]
