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Intuitive Surgical Q3 2007 Earnings Call Transcript

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2007-10-18 18:11:03.0

Tags: Intuitive Surgical Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Mr. Tao Levy, you may ask your question.

Tao Levy - Deutsche Bank Securities

Good afternoon everyone.

Jerry Mcnamara

Hi Tao.

Tao Levy - Deutsche Bank Securities

Hi. I guess my first question, on the strength in the international market, it seems like Belgium, the folks over there get real excited about robotic surgery. Maybe you could talk about how that development happened. Was it the government that ended up purchasing the five systems or is it a group of hospitals?

Jerry Mcnamara

Tao, this is Jerry. We have been growing our procedures in Belgium overtime and we have had installations in Belgium since early 2000s. And at the beginning of Q3 we had 10 sites up and running and we have been extremely well staffed and this really set the table to be able to sell five additional new systems during the quarter. So, now that to answer your last question and I have nothing to do with the government.

Tao Levy - Deutsche Bank

Is it something that you think international will continue to see, not necessarily in Belgium, but across other areas?

Jerry Mcnamara

Well, business is generally strong internationally. That being said, procedures were seasonally softer in the third quarter as we experienced long vacation times for both patients and physicians. Overall, we expect to see a lot of continued growth in the US and for the rest of the year we are not expecting or forecasting a higher percentage of business international sales than what we have seen earlier this year.

Tao Levy - Deutsche Bank

Alright, and if I look at the full year guidance, I guess effectively the fourth quarter, Ben, the right way to think about system placements in terms of total number is this somewhat slightly higher than the third quarter. Is that the, if I do the math quickly?

Ben Gong

Yeah, we are expecting some sequential unit growth in fourth quarter over the third quarter and that's incorporated in that new system revenue guidance of 48% to 52%.

Tao Levy - Deutsche Bank

Perfect. And then just lastly, what's the capital spending environment like in the hospitals these days just given some of the credit concerns. Obviously, given the third quarter didn't seem like there was any impact. But as you go ahead and start to talk to at the hospitals or administrators, any changes there that we should be looking at?

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