Indexes opened down on Wednesday but mostly recovered before the close, thanks largely to financial stocks. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) ended the day with small losses.
Today's stock market
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Expectations for rising interest rates boosted financial shares but hurt yield-sensitive shares such as utilities and real estate stocks. The SPDR S&P Regional Banking ETF (NYSEMKT:KRE) rose 1.2% while the Vanguard REIT ETF (NYSEMKT:VNQ) closed down 1.1%.
As for individual companies, Intuitive Surgical (NASDAQ:ISRG) announced preliminary sales results for last quarter that gave a boost to its shares, and SUPERVALU (NYSE:SVU) stock tumbled on a weak quarterly report.
Intuitive Surgical announces strong close to 2017
Intuitive Surgical, the market leader in surgical robots, released preliminary numbers for Q4 revenue that were well above expectations, and the stock jumped 6.6%. Revenue is expected to come in at $892 million -- up 18% year over year -- compared with the analyst consensus of $845 million.
Intuitive's business was strong across the board. The company shipped 216 new robot systems in the quarter, compared with 163 in the quarter a year earlier and 169 last quarter, and revenue from system shipments was up 20%. Instrument and accessory revenue increased 18%, and service revenue increased 13%.
One metric that is closely watched by Intuitive's investors is procedure growth. The company gets over two-thirds of its revenue from disposable instruments and supplies that are used with each procedure, so the company's focus is to drive increased usage of its robots. At the beginning of 2017, the company guided to procedure growth in the range of 9% to 12%. That guidance has been raised steadily through the year, and today the company announced that Q4 procedure growth was a strong 17%. For the full year, procedures increased 16%, at the top of the guidance range given last quarter.
Intuitive Surgical has managed to beat Wall Street's revenue expectations every quarter since Q1 of 2015, so at some point it should stop being a surprise. Today, though, investors sent the stock to a new all-time high after a huge gain in 2017.
SUPERVALU disappoints investors
Shares of grocer SUPERVALU dropped 13.7% today after the company reported fiscal Q3 2018 results that missed analysts' expectations for sales and caused it to slightly lower its full-year profit guidance. Sales were $3.94 billion, missing the analyst consensus of $3.99 billion, and up 31% from last year due primarily to the acquisition of grocery wholesaler Unified Grocers. Guidance for full-year adjusted EBITDA was lowered from a range of $475 million to $495 million to a range of $475 million to $485 million.
Net earnings per share from continuing operations were $0.46, but after adding back costs for mergers and store closures came in at $0.61. That figure, though, includes a tax benefit of $0.30 per share.
Retail sales continue to be a problem for the company in a highly competitive market. Retail net sales were down 4.1% to $1.02 billion, and same-store sales declined 3.5%, the same figure as last quarter, despite efforts to close underperforming stores and initiatives to increase private brands, organic offerings, and ready-to-eat meals. The wholesale segment, which the company is growing through acquisitions as a response to retail competition, grew sales 52% to $2.89 billion.
SUPERVALU has its work cut out for it as it tries to make a transition from a grocery store chain to a wholesale supplier of consumable goods. This quarter had indications of progress, but evidently it isn't happening fast enough to satisfy investors.