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Stryker (SYK) to Report Q4 Earnings: What's in the Cards?
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Stryker Corporation (SYK - Free Report) is scheduled to release its fourth-quarter 2022 results on Jan 31, after the closing bell. In the last reported quarter, the company delivered a negative earnings surprise of 5.36%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $2.83 per share, indicating an increase of 4.4% year over year.
The same for revenues stands at $4.95 billion, suggesting growth of 5.2% from the prior-year quarter.
Factors to Note
Stryker's MedSurg and Neurotechnology segment witnessed substantial sales growth on the back of improvement across all its subsegments in the third quarter. Improvement in volumes of products contributed to the upside, partially offset by lower prices. This momentum is likely to have continued in the fourth quarter.
With respect to the Orthopaedics & Spine segment, growth across Hip, Knee, and Trauma and Extremities subsegments is likely to have favored the segment's fourth-quarter performance.
Stryker is committed to the sustained expansion of Mako. This growth reflects the demand for its differentiated Mako robotic technology. The company witnessed both domestic and international growth (in Japan, Korea and emerging markets) in the third quarter of 2022. On its third-quarter earnings call, the company stated that it had a robust order book for Mako. The robust demand for Mako is likely to have contributed to the Orthopaedics & Spine segment's performance in the to-be-reported quarter. However, variability in the hospital environment may have offset some of the gains.
Stryker completed the acquisition of all the issued and outstanding shares of Vocera Communications’s common stock in February. Per management, the buyout will enable Stryker to enter the fast-growing digital care coordination and communications segment. The company has been continuing well with the Vocera integration progress. Investors will likely look for the potential impact of this integration when the company reports fourth-quarter results.
Stryker raised the lower end of its guidance for revenue growth in 2022, considering its strong order book for capital equipment and the sales momentum in the implant businesses during the third quarter.
However, ongoing supply chain disruptions and foreign currency movements are likely to have hurt its sales growth during the soon-to-be-reported quarter. Procedural volumes in China may have suffered a negative impact due to strict lockdown restrictions across major cities in the country. However, the impact of the economy’s recent opening is yet to be seen. The recent inflationary pressure is likely to have hurt its net margin, thus limiting its growth.
Stryker is taking action to lessen the rising inflationary pressures. It is also taking several cost-cutting initiatives, including restructuring plans. Although these initiative may help Stryker to boost its growth, they are likely to drive expenses in the upcoming few quarters. Investors are likely to ask questions on the progress of these strategic initiatives and their impact going forward on the fourth-quarter earnings call.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: Stryker has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #2.
Stocks to Consider
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +5.75% and a Zacks Rank of 2.
Cardinal Health’s stock has gained 31.8% in the past six months. CAH beat earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 3.04%, on average.
McKesson (MCK - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank of 2.
McKesson’s stock has gained 11.6% in the past six months. MCK missed earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 4.79%, on average.
AmerisourceBergen has an Earnings ESP of +0.26% and a Zacks Rank of 3.
AmerisourceBergen’s stock has gained 12.2% in the past six months. ABC topped earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 2.51%, on average.
Image: Bigstock
Stryker (SYK) to Report Q4 Earnings: What's in the Cards?
Stryker Corporation (SYK - Free Report) is scheduled to release its fourth-quarter 2022 results on Jan 31, after the closing bell. In the last reported quarter, the company delivered a negative earnings surprise of 5.36%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $2.83 per share, indicating an increase of 4.4% year over year.
The same for revenues stands at $4.95 billion, suggesting growth of 5.2% from the prior-year quarter.
Factors to Note
Stryker's MedSurg and Neurotechnology segment witnessed substantial sales growth on the back of improvement across all its subsegments in the third quarter. Improvement in volumes of products contributed to the upside, partially offset by lower prices. This momentum is likely to have continued in the fourth quarter.
With respect to the Orthopaedics & Spine segment, growth across Hip, Knee, and Trauma and Extremities subsegments is likely to have favored the segment's fourth-quarter performance.
Stryker is committed to the sustained expansion of Mako. This growth reflects the demand for its differentiated Mako robotic technology. The company witnessed both domestic and international growth (in Japan, Korea and emerging markets) in the third quarter of 2022. On its third-quarter earnings call, the company stated that it had a robust order book for Mako. The robust demand for Mako is likely to have contributed to the Orthopaedics & Spine segment's performance in the to-be-reported quarter. However, variability in the hospital environment may have offset some of the gains.
Stryker completed the acquisition of all the issued and outstanding shares of Vocera Communications’s common stock in February. Per management, the buyout will enable Stryker to enter the fast-growing digital care coordination and communications segment. The company has been continuing well with the Vocera integration progress. Investors will likely look for the potential impact of this integration when the company reports fourth-quarter results.
Stryker Corporation Price and Consensus
Stryker Corporation price-consensus-chart | Stryker Corporation Quote
Stryker raised the lower end of its guidance for revenue growth in 2022, considering its strong order book for capital equipment and the sales momentum in the implant businesses during the third quarter.
However, ongoing supply chain disruptions and foreign currency movements are likely to have hurt its sales growth during the soon-to-be-reported quarter. Procedural volumes in China may have suffered a negative impact due to strict lockdown restrictions across major cities in the country. However, the impact of the economy’s recent opening is yet to be seen. The recent inflationary pressure is likely to have hurt its net margin, thus limiting its growth.
Stryker is taking action to lessen the rising inflationary pressures. It is also taking several cost-cutting initiatives, including restructuring plans. Although these initiative may help Stryker to boost its growth, they are likely to drive expenses in the upcoming few quarters. Investors are likely to ask questions on the progress of these strategic initiatives and their impact going forward on the fourth-quarter earnings call.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: Stryker has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #2.
Stocks to Consider
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +5.75% and a Zacks Rank of 2.
Cardinal Health’s stock has gained 31.8% in the past six months. CAH beat earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 3.04%, on average.
McKesson (MCK - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank of 2.
McKesson’s stock has gained 11.6% in the past six months. MCK missed earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 4.79%, on average.
AmerisourceBergen has an Earnings ESP of +0.26% and a Zacks Rank of 3.
AmerisourceBergen’s stock has gained 12.2% in the past six months. ABC topped earnings estimates in the last reported quarter. It has a four-quarter earnings surprise of 2.51%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.