Shares of Intuitive Surgical climbed Tuesday after the company said it will report stronger than expected revenue in the fourth quarter as procedures performed with its robotic da Vinci system increased.
Intuitive said that while sales of the da Vinci system fell, surgeons performed more procedures using the systems. It said total revenue fell 5 percent in the fourth quarter to about $576 million from $609 million a year ago.
But that was still higher than the $548.6 million in revenue that analysts surveyed by FactSet expected.
The company's stock rose $37.38, or 9.5 percent, to $430.45 in morning trading. Its shares traded as high as $443.99, their highest in about two years.
The company said revenue from instruments used in da Vinci procedures grew 6 percent to $268 million. Intuitive Surgical Inc. said it sold 138 da Vinci systems during the fourth quarter, down from 175 a year ago, and revenue from system sales dropped 23 percent to $205 million. Service revenue rose 14 percent to $103 million.
The da Vinci system uses robotic arms, cameras and a remote-control console to help doctors perform surgery with tiny incisions. It is used in gynecological procedures, heart surgeries, prostatectomies, urology procedures, and other operations. In 2013 some experts questioned the use of da Vinci systems in routine hysterectomy procedures, saying the devices made the procedures more expensive but don't improve outcomes for patients.
The Sunnyvale, Calif., company said in July that reduced hospital admissions and conservative management choices by insurers were hurting its business. Later the same month Intuitive received a warning letter from the FDA after an inspection, and in December the company said a few older systems were affected by a "stalling" problem. Shares of Intuitive have fallen 31.5 percent since Feb. 27.
Intuitive Surgical said da Vinci systems were used in more general surgery and gynecology procedures in the U.S. and urology procedures in other countries in 2013. Total procedure volume rose 16 percent to 523,000. For the full year Intuitive Surgical said its revenue rose 4 percent to $2.27 billion.