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Stryker Q1 Earnings & Sales Miss Estimates on Cyber Disruption
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Key Takeaways
SYK reported Q1 EPS of $2.60, missing estimates by 12.8% and declining 8.5% year over year.
Revenues rose 2.6% to $6.02B but missed estimates, hurt by cyber-driven production disruptions.
Margins contracted due to shutdown impacts and tariffs, though MedSurg and Orthopedics saw growth.
Stryker Corporation (SYK - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.60, which missed the Zacks Consensus Estimate of $2.98 by 12.8%. The bottom line declined 8.5% year over year.
GAAP EPS was $1.93, up 14.2% from the year-ago quarter’s level.
Revenue Details
Revenues totaled $6.02 billion, which missed the Zacks Consensus Estimate by 4.4%. The top line improved 2.6% on a year-over-year basis and 1% at constant currency (cc).
Organically, sales were up 2.4%. Organic sales growth was driven by a 2.1% increase in unit volume and 0.3% improvement in prices.
Stryker Corporation Price, Consensus and EPS Surprise
Revenues in the United States amounted to $4.48 billion, up 0.8% from the prior-year quarter’s level. International sales increased 8.3% year over year reportedly and 1.5% at cc to $1.54 billion.
Segmental Analysis
Stryker divested its U.S. spinal implants business to Viscogliosi Brothers, LLC, a family-owned investment firm specializing in the neuro-musculoskeletal space in April 2025. The company now posts its Spine enabling technologies results as part of other orthopedics. Interventional Spine results are reported as part of neurocrine. As a result, spinal implants are now reported separately within orthopedics.
Effective first-quarter 2026, Stryker realigned its reporting structure by combining the orthopaedic instruments portfolio from its Instruments business with the Mako and enabling technologies portfolio from Other Orthopaedics into a newly formed Ortho Tech segment.
MedSurg and Neurotechnology: This segment reported sales of $3.21 billion, up 5% year over year and 3.6% at cc.
In the quarter under review, MedSurg and Neurotechnology recorded organic sales growth of 0.9%. Instruments recorded U.S. sales growth of 19.1%.
Endoscopy saw a 1.2% U.S. decline. Medical declined 6.9% in the United States.
Vascular grew 37.9% in the United States.
Internationally, sales were up 11.7%, driven by growth across Endoscopy, Instruments, Medical and Vascular businesses.
Orthopedics: Sales in the segment amounted to $2.8 billion, up 0.1% year over year but down 1.8% at cc. Organically, sales were up 4.1%. The U.S. knee business grew 1.4%.
U.S. hips business grew 2.3%. Trauma and Extremities business improved 7.6% in the United States. U.S. Ortho Tech business grew 2%. International Orthopaedics grew 12.2%.
Margins
Adjusted gross profit totaled $3.83 billion in the reported quarter, down 0.5% from the year-ago quarter’s level. Adjusted gross margin contracted 190 basis points (bps) to 63.6%, reflecting the impact of lost manufacturing absorption from production shutdowns due to the cyber incident as well as the impact of tariffs.
Total operating expenses were $2.82 billion, down 21.4% from the year-ago quarter’s level.
Adjusted operating income totaled $1.27 billion, down 5.4% from the year-ago level. Adjusted operating margin was 21.1%, down 180 bps.
Financial Update
Stryker exited the first quarter with cash and cash equivalents of $2.97 billion compared with $4.01 billion at the end of the fourth quarter of 2025.
Cumulative net cash provided by operating activities totaled $581 million compared with $250 million a year ago.
2026 Guidance
Stryker has maintained its guidance for 2026. The company expects total revenues to grow in the range of 8-9.5% on an organic basis. The Zacks Consensus Estimate for total revenues is pegged at $27.21 billion, implying growth of 8.3%.
SYK expects full-year 2026 EPS to be in the range of $14.90-$15.10. The Zacks Consensus Estimate for earnings is pegged at $14.91 per share.
Wrapping Up
Stryker exited the first quarter of 2026 with weaker-than-expected sales and earnings. The underperformance was primarily due to a late-quarter cyber incident that disrupted operations, delayed shipments and deferred revenue recognition. Despite these headwinds, underlying demand remained healthy across geographies, supported by solid procedural volumes and strong capital order trends. Margin pressure reflected lost manufacturing absorption, tariffs and higher interest expense tied to prior acquisitions.
SYK’s shares have lost 10.3% year to date compared with the industry’s 21.5% decline. The S&P 500 has increased 6.2% in the same time frame.
Image Source: Zacks Investment Research
Looking ahead, management expects recovery through 2026 as deferred procedures, production backlogs and revenue recognition normalize, particularly in the second half. Growth drivers include continued momentum in robotic surgery (Mako), new product launches and sustained hospital capital spending. Strategic acquisitions — especially Inari and the planned Amplitude Vascular Systems deal — highlight Stryker’s push into faster-growing cardiovascular markets, enhancing diversification beyond orthopaedics.
However, risks remain, including execution on recovery, tariff pressures, geopolitical uncertainties and integration complexity from expanding into new adjacencies. Still, diversified end markets and active M&A position Stryker for stronger growth in the back half of 2026.
Globus Medical’s shares have gained 3.3% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 90 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 42.4% in the year-to-date period against the industry’s 20.5% decline. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Cardinal Health’s shares have declined 6.2% in the year-to-date period. Estimates for the company’s third-quarter 2026 EPS have decreased 1 cent to $2.80 in the past 30 days. CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 9.30%. In the last reported quarter, it posted an earnings surprise of 10.04%.
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Stryker Q1 Earnings & Sales Miss Estimates on Cyber Disruption
Key Takeaways
Stryker Corporation (SYK - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $2.60, which missed the Zacks Consensus Estimate of $2.98 by 12.8%. The bottom line declined 8.5% year over year.
GAAP EPS was $1.93, up 14.2% from the year-ago quarter’s level.
Revenue Details
Revenues totaled $6.02 billion, which missed the Zacks Consensus Estimate by 4.4%. The top line improved 2.6% on a year-over-year basis and 1% at constant currency (cc).
Organically, sales were up 2.4%. Organic sales growth was driven by a 2.1% increase in unit volume and 0.3% improvement in prices.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker Corporation price-consensus-eps-surprise-chart | Stryker Corporation Quote
Revenues by Geography
Revenues in the United States amounted to $4.48 billion, up 0.8% from the prior-year quarter’s level. International sales increased 8.3% year over year reportedly and 1.5% at cc to $1.54 billion.
Segmental Analysis
Stryker divested its U.S. spinal implants business to Viscogliosi Brothers, LLC, a family-owned investment firm specializing in the neuro-musculoskeletal space in April 2025. The company now posts its Spine enabling technologies results as part of other orthopedics. Interventional Spine results are reported as part of neurocrine. As a result, spinal implants are now reported separately within orthopedics.
Effective first-quarter 2026, Stryker realigned its reporting structure by combining the orthopaedic instruments portfolio from its Instruments business with the Mako and enabling technologies portfolio from Other Orthopaedics into a newly formed Ortho Tech segment.
MedSurg and Neurotechnology: This segment reported sales of $3.21 billion, up 5% year over year and 3.6% at cc.
In the quarter under review, MedSurg and Neurotechnology recorded organic sales growth of 0.9%. Instruments recorded U.S. sales growth of 19.1%.
Endoscopy saw a 1.2% U.S. decline. Medical declined 6.9% in the United States.
Vascular grew 37.9% in the United States.
Internationally, sales were up 11.7%, driven by growth across Endoscopy, Instruments, Medical and Vascular businesses.
Orthopedics: Sales in the segment amounted to $2.8 billion, up 0.1% year over year but down 1.8% at cc. Organically, sales were up 4.1%. The U.S. knee business grew 1.4%.
U.S. hips business grew 2.3%. Trauma and Extremities business improved 7.6% in the United States. U.S. Ortho Tech business grew 2%. International Orthopaedics grew 12.2%.
Margins
Adjusted gross profit totaled $3.83 billion in the reported quarter, down 0.5% from the year-ago quarter’s level. Adjusted gross margin contracted 190 basis points (bps) to 63.6%, reflecting the impact of lost manufacturing absorption from production shutdowns due to the cyber incident as well as the impact of tariffs.
Total operating expenses were $2.82 billion, down 21.4% from the year-ago quarter’s level.
Adjusted operating income totaled $1.27 billion, down 5.4% from the year-ago level. Adjusted operating margin was 21.1%, down 180 bps.
Financial Update
Stryker exited the first quarter with cash and cash equivalents of $2.97 billion compared with $4.01 billion at the end of the fourth quarter of 2025.
Cumulative net cash provided by operating activities totaled $581 million compared with $250 million a year ago.
2026 Guidance
Stryker has maintained its guidance for 2026. The company expects total revenues to grow in the range of 8-9.5% on an organic basis. The Zacks Consensus Estimate for total revenues is pegged at $27.21 billion, implying growth of 8.3%.
SYK expects full-year 2026 EPS to be in the range of $14.90-$15.10. The Zacks Consensus Estimate for earnings is pegged at $14.91 per share.
Wrapping Up
Stryker exited the first quarter of 2026 with weaker-than-expected sales and earnings. The underperformance was primarily due to a late-quarter cyber incident that disrupted operations, delayed shipments and deferred revenue recognition. Despite these headwinds, underlying demand remained healthy across geographies, supported by solid procedural volumes and strong capital order trends. Margin pressure reflected lost manufacturing absorption, tariffs and higher interest expense tied to prior acquisitions.
SYK’s shares have lost 10.3% year to date compared with the industry’s 21.5% decline. The S&P 500 has increased 6.2% in the same time frame.
Image Source: Zacks Investment Research
Looking ahead, management expects recovery through 2026 as deferred procedures, production backlogs and revenue recognition normalize, particularly in the second half. Growth drivers include continued momentum in robotic surgery (Mako), new product launches and sustained hospital capital spending. Strategic acquisitions — especially Inari and the planned Amplitude Vascular Systems deal — highlight Stryker’s push into faster-growing cardiovascular markets, enhancing diversification beyond orthopaedics.
However, risks remain, including execution on recovery, tariff pressures, geopolitical uncertainties and integration complexity from expanding into new adjacencies. Still, diversified end markets and active M&A position Stryker for stronger growth in the back half of 2026.
Zacks Rank & Stocks to Consider
Stryker currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Globus Medical (GMED - Free Report) , Phibro Animal Health (PAHC - Free Report) and Cardinal Health (CAH - Free Report) . While Globus Medical sports a Zacks Rank #1 (Strong Buy) at present, Phibro Animal Health and Cardinal Health carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical’s shares have gained 3.3% in the year-to-date period. Estimates for the company’s first-quarter 2026 EPS have increased 1 cent to 90 cents in the past 30 days. GMED’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 18.79%. In the last reported quarter, it posted an earnings surprise of 20.75%.
Estimates for Phibro Animal Health’s third-quarter fiscal 2026 EPS have remained constant at 72 cents in the past 30 days. Shares of the company have risen 42.4% in the year-to-date period against the industry’s 20.5% decline. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.15%. In the last reported quarter, it delivered an earnings surprise of 26.09%.
Cardinal Health’s shares have declined 6.2% in the year-to-date period. Estimates for the company’s third-quarter 2026 EPS have decreased 1 cent to $2.80 in the past 30 days. CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 9.30%. In the last reported quarter, it posted an earnings surprise of 10.04%.