We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Stryker (SYK) Beats on Q2 Earnings, International Sales Up
Read MoreHide Full Article
Maintaining its streak of positive earnings surprises, Stryker Corporation (SYK - Free Report) reported second-quarter 2018 adjusted earnings per share of $1.76, beating the Zacks Consensus Estimate by 1.7%. Earnings improved 15% year over year and also exceeded the high end of the company’s guided range.
Meanwhile, shares of Stryker have rallied 18.6% compared with the industry’s rise of 13.1% in a year’s time.
The stock carries a Zacks Rank #4 (Sell).
Revenue Details
The Michigan-based medical device company reported revenues of $3.32 billion, beating the Zacks Consensus Estimate of $3.31 billion by a narrow margin. Revenues shot up 10.3% on a year-over-year basis and 9.9% at constant currency (cc).
Per management, organic net sales increased 7.9% in the quarter.
Revenue by Geography
Revenues in United States came in at $2.39 billion, up 9.3% at cc, while international sales rose 11.3% to $937 million. U.S. organic sales growth was 7% and international organic sales improved 10.2%.
Per management, emerging markets grew double digits. The company also recorded solid sales in Canada, Europe and Japan.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker reports through three segments — Orthopaedic, MedSurg and Neurotechnology & Spine.
Orthopaedic
In the quarter under review, revenues in the segment totaled $1.23 billion, up 6.6% at cc. Per management, the segment saw organic growth of 7% on strength in knees and trauma and extremities. The company’s Mako momentum continues with over 550 robots installed globally.
MedSurg
This segment reported sales worth $1.46 billion, up 9.2% at cc. Per management, the segment grew 7% organically in the quarter, led by strong instruments performance. Notably, instruments revenues improved 12.6% at cc.
However, sustainability revenues slowed down. Per management, supply issues in the Puerto Rico facility have partially offset growth in the segment.
Neurotechnology & Spine
Sales in the segment grossed $639 million, improving 18.5% at cc. Per management, the upside can be attributed to Neurotechnology growth of 23.1% and Spine organic growth of 9.5%.
Margins
In the second quarter, gross profit totaled $2.19 billion, up 10% from the year-ago quarter. Gross margin was 65.9%, down 20 basis points (bps).
Operating income totaled $672 million, which climbed 33.9% from the prior-year quarter. Operating margin was 20.2%, up 350 bps.
Balance Sheet
Stryker exited the second quarter with $1.9 billion of cash and marketable securities. However, total debt remained unchanged at $7.2 billion.
Cash flow from operations was $946 million.
Guidance
For 2018, Stryker expects organic net sales growth within 7-7.5%.
Adjusted earnings per share are anticipated within $7.22 to $7.27. Notably, the Zacks Consensus Estimate for earnings is pegged at $7.22, coinciding with the low end of the guidance.
For the third quarter of 2018, earnings are projected within $1.65 to $1.70. The consensus mark for earnings is pinned at $1.70, at the high end of the guided range.
Our Take
Stryker wrapped up the second quarter on a solid note, with earnings and revenues beating the consensus mark. The company continues to gain from its flagship Mako Total Knee platform, which drove its core Orthopaedic segment. In fact, the company witnessed solid growth in Mako robot installations in the quarter. Surging domestic sales is a positive. Moreover, solid performance in emerging markets and Europe paints a bright picture. Considerable expansion in operating margin is encouraging as well. Higher R&D expenses indicate increasing focus on innovation.
On the flip side, a declining gross margin raises concern. The company’s debt remains unchanged, which adds to the woes. Supply issues in the Puerto Rico facility continue to plague the company. The slowdown of MedSurg’s sustainability revenue growth is another negative. Stiff competition is likely to mar Stryker’s prospects.
Key Picks
A few better-ranked stocks in the broader medical space are Masimo Corporation (MASI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted earnings per share is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted earnings per share stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Stryker (SYK) Beats on Q2 Earnings, International Sales Up
Maintaining its streak of positive earnings surprises, Stryker Corporation (SYK - Free Report) reported second-quarter 2018 adjusted earnings per share of $1.76, beating the Zacks Consensus Estimate by 1.7%. Earnings improved 15% year over year and also exceeded the high end of the company’s guided range.
Meanwhile, shares of Stryker have rallied 18.6% compared with the industry’s rise of 13.1% in a year’s time.
The stock carries a Zacks Rank #4 (Sell).
Revenue Details
The Michigan-based medical device company reported revenues of $3.32 billion, beating the Zacks Consensus Estimate of $3.31 billion by a narrow margin. Revenues shot up 10.3% on a year-over-year basis and 9.9% at constant currency (cc).
Per management, organic net sales increased 7.9% in the quarter.
Revenue by Geography
Revenues in United States came in at $2.39 billion, up 9.3% at cc, while international sales rose 11.3% to $937 million. U.S. organic sales growth was 7% and international organic sales improved 10.2%.
Per management, emerging markets grew double digits. The company also recorded solid sales in Canada, Europe and Japan.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker Corporation Price, Consensus and EPS Surprise | Stryker Corporation Quote
Segment Details
Stryker reports through three segments — Orthopaedic, MedSurg and Neurotechnology & Spine.
Orthopaedic
In the quarter under review, revenues in the segment totaled $1.23 billion, up 6.6% at cc. Per management, the segment saw organic growth of 7% on strength in knees and trauma and extremities. The company’s Mako momentum continues with over 550 robots installed globally.
MedSurg
This segment reported sales worth $1.46 billion, up 9.2% at cc. Per management, the segment grew 7% organically in the quarter, led by strong instruments performance. Notably, instruments revenues improved 12.6% at cc.
However, sustainability revenues slowed down. Per management, supply issues in the Puerto Rico facility have partially offset growth in the segment.
Neurotechnology & Spine
Sales in the segment grossed $639 million, improving 18.5% at cc. Per management, the upside can be attributed to Neurotechnology growth of 23.1% and Spine organic growth of 9.5%.
Margins
In the second quarter, gross profit totaled $2.19 billion, up 10% from the year-ago quarter. Gross margin was 65.9%, down 20 basis points (bps).
Operating income totaled $672 million, which climbed 33.9% from the prior-year quarter. Operating margin was 20.2%, up 350 bps.
Balance Sheet
Stryker exited the second quarter with $1.9 billion of cash and marketable securities. However, total debt remained unchanged at $7.2 billion.
Cash flow from operations was $946 million.
Guidance
For 2018, Stryker expects organic net sales growth within 7-7.5%.
Adjusted earnings per share are anticipated within $7.22 to $7.27. Notably, the Zacks Consensus Estimate for earnings is pegged at $7.22, coinciding with the low end of the guidance.
For the third quarter of 2018, earnings are projected within $1.65 to $1.70. The consensus mark for earnings is pinned at $1.70, at the high end of the guided range.
Our Take
Stryker wrapped up the second quarter on a solid note, with earnings and revenues beating the consensus mark. The company continues to gain from its flagship Mako Total Knee platform, which drove its core Orthopaedic segment. In fact, the company witnessed solid growth in Mako robot installations in the quarter. Surging domestic sales is a positive. Moreover, solid performance in emerging markets and Europe paints a bright picture. Considerable expansion in operating margin is encouraging as well. Higher R&D expenses indicate increasing focus on innovation.
On the flip side, a declining gross margin raises concern. The company’s debt remains unchanged, which adds to the woes. Supply issues in the Puerto Rico facility continue to plague the company. The slowdown of MedSurg’s sustainability revenue growth is another negative. Stiff competition is likely to mar Stryker’s prospects.
Key Picks
A few better-ranked stocks in the broader medical space are Masimo Corporation (MASI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Integer Holdings Corp (ITGR - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted earnings per share is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted earnings per share stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>