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Intuitive shares battered after Q3 revenue miss

CNBC with AP
Friday, 18 Oct 2013 | 1:37 PM ET
Intuitive Surgical: Robotics under fire
Hank Greenberg, C.V. Starr and Company chairman and CEO, blew the whistle on Intuitive Surgical's robotic problems earlier this year. Greenberg says, "There is a market correction in progress for the over-proliferation of robotic surgery." CNBC contributor Herb Greenberg reports.

Intuitive Surgical shares slumped after the company posted a 14 percent decrease in third-quarter net income on declining sales of its da Vinci surgical system.

Revenue slipped 7 percent from a year earlier, and the company said full-year sales would come in on the lower end of its previously cut forecast range.

Intuitive said its third-quarter results were affected by continued slow growth in the use of da Vinci in gynecology procedures. Shares fell 5 percent Friday afternoon. (What's the stock doing now? Click here)

Options expert Jon Najarian said the da Vinci's high cost of $1.5 million is one reason for the company's revenue drop.

Health Secretary Jeremy Hunt is demonstrated a robotic da Vinci Surgical System by Clinton John, Simulation and Clinical Skills Centre Manager (L), during his tour of the Education Centre and headquarters of University College Hospital, prior to delivering a speech on the 'silent scandal' of errors in the NHS, on June 21, 2013 in London, England.
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Health Secretary Jeremy Hunt is demonstrated a robotic da Vinci Surgical System by Clinton John, Simulation and Clinical Skills Centre Manager (L), during his tour of the Education Centre and headquarters of University College Hospital, prior to delivering a speech on the 'silent scandal' of errors in the NHS, on June 21, 2013 in London, England.

The robotic device maker also reported that hospitals are increasingly cutting back on the use of their devices because of reimbursements tied to cost savings under the Affordable Care Act.

"Our third-quarter results were impacted by the same pressures we faced in the first half of the year—namely, moderating growth in benign gynecology, combined with changing hospital capital spending priorities associated with the implementation of the Affordable Care Act," Chief Executive Officer Gary Guthart said in the statement.

—By CNBC.com with AP.

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