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Stryker Corporation (SYK - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $3.46, which beat the Zacks Consensus Estimate of $3.27 by 5.81%. The bottom line also improved 15.3% year over year.
GAAP EPS was $2.98, up 102.7% from the year-ago quarter.
Price Performance
SYK’s shares have gained 13.4% in the past six months compared with the industry's gain of 0.8%. The S&P 500 Index increased 7.6% in the same period.
Image Source: Zacks Investment Research
Revenue Details
Revenues totaled $5.8 billion, which beat the Zacks Consensus Estimate of $5.6 billion by 3.81%. The top line also improved 11.8% on a year-over-year basis and 11.5% at constant currency (cc).
Revenues by Geography
Revenues in the United States amounted to $4.36 billion, up 12.8% from the prior-year quarter’s actual. International sales increased to $1.46 billion and grew 8.9% year over year reportedly, and up 7.8% excluding the negative impact of currency.
Segmental Analysis
MedSurg and Neurotechnology:This segment reported sales of $3.43 billion, up 12.3% year over year and 12.0% at cc. Sales growth was driven by increased unit volume as well as higher prices.
Orthopedics and Spine:Sales in the segment amounted to $2.4 billion, up 11.0% year over year and 10.7% at cc. This growth was driven by increased unit volume, partially offset by lower prices.
Margins
Adjusted gross profit totaled $3.71 billion in the reported quarter, up 13.8% from the year-ago quarter. Adjusted gross margin was 63.9%, up 120 basis points (bps).
Total operating expenses were $2.45 billion, up 1.0% from the year-ago quarter’s level.
Adjusted operating income totaled $1.58 billion, up 14.3% from the year-ago quarter. Adjusted operating margin was 27.2%, up 60 bps.
Full-Years Results
Stryker recorded total revenues of $20.5 billion in 2023, up 11.1% year over year. Adjusted EPS for 2023 was $10.60, up 13.5% from the prior year.
Financial Update
Strykerexited the fourth quarter of 2023 with cash and cash equivalents of $3.02 billion compared with $1.93 billion in the third quarter.
Cumulative net cash provided by operating activities in the fourth quarter totaled $3.7 billion compared with $2.6 billion a year ago.
2024 Guidance Issued
Stryker announced its guidance for 2024. The company expects organic growth for total revenues in the range of 7.5-9.0% compared with 2023-end. The Zacks Consensus Estimate for total revenues is pegged at $21.81 billion. Based on the steady progress of the company’s pricing actions, it is expecting the full-year impact of price to be roughly flat.
SYK expects adjusted EPS in the band of $11.70-$12.00, implying growth of 10.8% at the midpoint of the range. The Zacks Consensus Estimate is pegged at $11.54.
In 2024, the company expects unfavorable currency movement to hurt its top-line growth more in the first half of the year and EPS by 5-10 cents.
Wrapping Up
Stryker exited fourth-quarter 2023 on a strong note, wherein both earnings and revenues beat their respective Zacks Consensus Estimate. The company surpassed $20 billion in sales for 2023 while witnessing strong performance across its segments in the United States. Strong International sales also buoy optimism. SYK expects the momentum to continue in 2024 on the back of ongoing procedural recovery, a strong order book for capital equipment, and an improvement in price along with a strong pipeline of innovation.
The company is adopting several cost-cutting measures, including restructuring plans. Stryker’s prospects in 2024 seem promising on the back of strong customer demand for its existing products as well as new launches. Its guidance for 2024 earnings and revenues appears encouraging.
Moreover, the expansion in both gross and operating margins is reassuring. However, stiff competition in the MedTech space is a concern.
Stryker Corporation Price, Consensus and EPS Surprise
Some other top-ranked stocks in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Acadia Healthcare (ACHC - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’s shares have gained 1.9% in the past six months against the industry’s 5% decline.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.
Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.
Acadia’s shares have gained 11.7% in the past six months against the industry’s decline of 5%.
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Stryker's (SYK) Q4 Earnings & Revenues Surpass Estimates
Stryker Corporation (SYK - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $3.46, which beat the Zacks Consensus Estimate of $3.27 by 5.81%. The bottom line also improved 15.3% year over year.
GAAP EPS was $2.98, up 102.7% from the year-ago quarter.
Price Performance
SYK’s shares have gained 13.4% in the past six months compared with the industry's gain of 0.8%. The S&P 500 Index increased 7.6% in the same period.
Image Source: Zacks Investment Research
Revenue Details
Revenues totaled $5.8 billion, which beat the Zacks Consensus Estimate of $5.6 billion by 3.81%. The top line also improved 11.8% on a year-over-year basis and 11.5% at constant currency (cc).
Revenues by Geography
Revenues in the United States amounted to $4.36 billion, up 12.8% from the prior-year quarter’s actual. International sales increased to $1.46 billion and grew 8.9% year over year reportedly, and up 7.8% excluding the negative impact of currency.
Segmental Analysis
MedSurg and Neurotechnology:This segment reported sales of $3.43 billion, up 12.3% year over year and 12.0% at cc. Sales growth was driven by increased unit volume as well as higher prices.
Orthopedics and Spine:Sales in the segment amounted to $2.4 billion, up 11.0% year over year and 10.7% at cc. This growth was driven by increased unit volume, partially offset by lower prices.
Margins
Adjusted gross profit totaled $3.71 billion in the reported quarter, up 13.8% from the year-ago quarter. Adjusted gross margin was 63.9%, up 120 basis points (bps).
Total operating expenses were $2.45 billion, up 1.0% from the year-ago quarter’s level.
Adjusted operating income totaled $1.58 billion, up 14.3% from the year-ago quarter. Adjusted operating margin was 27.2%, up 60 bps.
Full-Years Results
Stryker recorded total revenues of $20.5 billion in 2023, up 11.1% year over year. Adjusted EPS for 2023 was $10.60, up 13.5% from the prior year.
Financial Update
Strykerexited the fourth quarter of 2023 with cash and cash equivalents of $3.02 billion compared with $1.93 billion in the third quarter.
Cumulative net cash provided by operating activities in the fourth quarter totaled $3.7 billion compared with $2.6 billion a year ago.
2024 Guidance Issued
Stryker announced its guidance for 2024. The company expects organic growth for total revenues in the range of 7.5-9.0% compared with 2023-end. The Zacks Consensus Estimate for total revenues is pegged at $21.81 billion. Based on the steady progress of the company’s pricing actions, it is expecting the full-year impact of price to be roughly flat.
SYK expects adjusted EPS in the band of $11.70-$12.00, implying growth of 10.8% at the midpoint of the range. The Zacks Consensus Estimate is pegged at $11.54.
In 2024, the company expects unfavorable currency movement to hurt its top-line growth more in the first half of the year and EPS by 5-10 cents.
Wrapping Up
Stryker exited fourth-quarter 2023 on a strong note, wherein both earnings and revenues beat their respective Zacks Consensus Estimate. The company surpassed $20 billion in sales for 2023 while witnessing strong performance across its segments in the United States. Strong International sales also buoy optimism. SYK expects the momentum to continue in 2024 on the back of ongoing procedural recovery, a strong order book for capital equipment, and an improvement in price along with a strong pipeline of innovation.
The company is adopting several cost-cutting measures, including restructuring plans. Stryker’s prospects in 2024 seem promising on the back of strong customer demand for its existing products as well as new launches. Its guidance for 2024 earnings and revenues appears encouraging.
Moreover, the expansion in both gross and operating margins is reassuring. However, stiff competition in the MedTech space is a concern.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker Corporation price-consensus-eps-surprise-chart | Stryker Corporation Quote
Zacks Rank
Stryker currently carries a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Acadia Healthcare (ACHC - Free Report) .
Universal Health Services, carrying a Zacks Rank #2 at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UHS’s shares have gained 1.9% in the past six months against the industry’s 5% decline.
Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.
Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.
Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.
Acadia’s shares have gained 11.7% in the past six months against the industry’s decline of 5%.