What happened
Intuitive Surgical (ISRG -0.50%) was the subject of some encouraging news delivered on Thursday, but investors still traded out of the stock. Shares of the robotic surgical-equipment maker fell by 2%, more than double the 0.8% decline of the S&P 500 index.
So what
That morning, Intuitive's business partner Luna Innovations (LUNA -2.93%) announced the two companies had signed a new supply contract. Luna, a developer of fiber-optic based technology, will provide photonic subsystems to Intuitive to be used in the latter's robotic surgical solutions. All told, the contract is worth $14.2 million. It wasn't clear how long it will be in force.
In the announcement, Luna waxed enthusiastic about the deal and the business of its partner. "We are excited to expand our relationship with Intuitive Surgical and support its visionary leadership in improving human health and surgical outcomes," the company's CEO Scott Graeff was quoted as saying. "Luna is honored to help advance this leadership by supplying critical technologies over the years to come."
Now what
While the expansion of cooperation with an important supplier is usually good news for a stock, in this instance, it wasn't enough to improve sentiment on Intuitive. As a tech-focused company, Intuitive is, to some extent, guilty by its association with the tech sector. Many people are trading out of their stocks in this asset class on macroeconomic concerns that are only growing, if anything.
This might provide a nice discount for those interested in Intuitive. It's not only a unique company on the cutting edge of medical technology, it's also well placed to take advantage of higher spending as the U.S. population ages. Collectively, analysts tracking the stock are expecting revenue to rise by almost 13% between now and next year and per-share earnings to increase by 18%.
