NEW YORK (AP) — Shares of Intuitive Surgical Inc. slumped Friday after the company reported slower growth than expected in surgical procedures performed with its da Vinci robotic system.
THE SPARK: The company reported quarterly results after the market closed Thursday. Net income and revenue topped Wall Street exceptions. Intuitive said da Vinci surgical procedures rose 18 percent as the device was used in more general surgeries, as well as gynecology procedures, in the U.S. and urology procedures in other countries.
The first quarter of 2012 included an extra day because of leap year. Intuitive Surgical said procedures grew 20 percent compared to last year, excluding the extra day.
Intuitive said earlier this year that da Vinci surgical procedures should grow 20 to 23 percent in 2013, and based on its first-quarter results it now expects to reach the lower end of that range.
THE BIG PICTURE: The Sunnyvale, Calif., company said da Vinci procedures increased 25 percent in the fourth quarter. Despite the continued growth, Intuitive Surgical and da Vinci have come under greater scrutiny from regulators and doctors in recent months because of concerns about the price of the procedures and reports of side effects or mistakes.
Many of the concerns have been related to the use of da Vinci systems in hysterectomies, and the company said growth in hysterectomy procedures was slower than expected during the first quarter. A study in February said robotic procedures resulted in higher-priced hysterectomies without better outcomes. The Food and Drug Administration also announced a probe into the da Vinci system.
Analysts said some concerns have been raised before, and they expect da Vinci use to grow over the longer term.
Intuitive Surgical's first-quarter net income grew by 32 percent to $188.9 million, or $4.56 per share. Revenue rose 23 percent to $611.4 million, and the company said it sold 164 da Vinci systems, up from 140 a year ago.
Analysts expected profit of $3.98 per share and $582.6 million in revenue, according to FactSet.
THE ANALYSIS: Mizuho Securities analyst Michael Matson said the company had a "very strong" quarter, but procedure growth fell short of expectations because of the controversies surrounding the da Vinci system and an overall slowdown. He kept a "Buy" rating on the stock with a price target of $636 per share.
SHARE ACTION: Intuitive Surgical shares fell $22.63, or 4.6 percent, to $470.74 in morning trading. The shares are down 14 percent since the end of February.