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Intuitive Surgical raises 2018 forecast for procedure growth

Intuitive Surgical Inc. reported third-quarter growth in earnings, with 20% increases over last year in both procedure growth and instrument and accessory revenue.

The medical device maker reported a revenue of $921 million, an increase of 14% compared with the year-ago quarter and a 1% increase over the second-quarter revenue. Overall procedure growth for the company increased by 20%, a 5% increase over the prior-year period and a 2% increase over the second quarter.

Calvin Darling, Intuitive's head of investor relations, said on an Oct. 18 earnings call that the growth was led by hernia repair and colorectal procedures as well as certain general surgery procedures including cholecystectomy. Darling also said that urology and gynecology procedures grew as well.

CEO Gary Guthart was enthusiastic about the companies increase of procedures in Japan, which grew above 40% year-over-year.

"Right now, demand looks really good," Guthart said. "It's really the pipeline of activities from demand to clinical cases and up and running programs that's the step."

Intuitive increased its 2018 forecast for procedure growth and slightly increased its range for pro forma gross profit margin. Intuitive procedure growth forecast increased from a range of 14.5% to 16.5% to a range of 17% to 18%. Gross profit is expected to slightly increase from a range of 70% to 71.5% to a range of 70.5% to 71.5%.

Darling did not give a specific estimate for possible 2019 procedure growth but said that the company expects to see similar growth next year as in 2018 and 2017.

Intuitive also reported that revenue for instruments and accessory totaled $486 million, an increase of 21% compared to 2017. The company began its early rollout of SureForm 60, Intuitive's new staple device that received clearance from the U.S. Food and Drug Administration in July.

Guthart said the product is currently in its first base launch and it will start to expand in 2019, adding that the long-term looks "quite good" for the new product.

The CEO was slightly hesitant when an analyst questioned him about the company's future prospects in China. He said the "long-term opportunity there is great" but noted that Intuitive will experience a little more headwind there.

"We think the macro trade environment is pressured," Guthart said. "And we think that that pressure does not help us."

However, Guthart stated that the company is still expecting to make incremental progress there, despite the current environment.