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SYK Stock Skids as Q3 Earnings and Sales Miss & 2026 Outlook Cut
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Key Takeaways
Stryker's Q3 EPS of $3.52 and sales of $6.52B missed estimates, sending shares down 11.8% after hours.
Weak hip and knee procedures, cybersecurity disruptions and SAP challenges weighed on Stryker's performance.
SYK cut its 2026 organic sales growth outlook to 6.5-7.0% and adjusted EPS guidance to $14.80-$14.90.
Stryker Corporation (SYK - Free Report) reported third-quarter 2026 adjusted earnings of $3.52 per share, up 10.3% year over year. The figure missed the Zacks Consensus Estimate of $3.56 by 1.1%. GAAP EPS declined 11.7% to $1.96.
Revenues were $6.52 billion, up 7.7% reportedly as well as organically. However, the sales missed the Zacks Consensus Estimate by 0.9%. Organic growth was supported by strong MedSurg demand and elevated capital equipment orders. However, weaker hip and knee procedures, commercial execution challenges and peripheral vascular supply constraints weighed on performance.
Following lower-than-expected sales and EPS amid Orthopaedic headwinds and disrupted commercial execution due to a cybersecurity incident and SAP implementation, Stryker lowered its outlook for 2026. Expectations of continued weakness weighed on investor sentiment, sending the stock down 11.8% in after-hours trading following the earnings release. The company’s shares have lost 11.3% in the year-to-date period compared with the industry’s 18.9% decline. The S&P 500 Index has risen 12.4% in the same time frame.
Image Source: Zacks Investment Research
Stryker's MedSurg Portfolio Sustains Momentum
MedSurg and Neurotechnology revenues increased 9.2% to $3.66 billion, with organic growth of 9.1%. Endoscopy sales climbed 13.9% to $1.02 billion, supported by operating room infrastructure investments and strong Sports Medicine demand.
Medical revenues rose 9.7% to $1.08 billion, driven by Sage, Smart Care and elevated capital demand. Instruments sales increased 5.1% to $996 million. Growth was partially offset by deferred neurosurgical equipment purchases ahead of the Sonopet 3 launch.
Vascular sales advanced 8.0% to $566 million, benefiting from one-time revenues associated with a regulatory milestone in China. However, manufacturing-related supply disruptions continued to constrain product availability. Management expects inventory levels to normalize through year-end.
Orthopaedics revenues increased 5.7% to $2.86 billion, with organic growth of 5.9%. Knees sales rose 1.1% to $635 million, while Hips revenues declined 1% to $453 million. While Knees recorded 1.3% organic growth in the United States, Hips sales were down 0.6% organically.
Trauma and Extremities revenues increased 5.3% to $1.01 billion, supported by upper-extremity demand. Ortho Tech sales jumped 15.8% to $754 million, reflecting strong Mako robotic-system sales and orthopedic power-tool demand.
The first-quarter cybersecurity incident and July SAP implementation disrupted commercial execution. These challenges delayed adoption of Mako RPS and Triathlon Gold despite positive customer feedback. Management is strengthening sales execution to improve competitive conversions.
SYK's US Sales Growth Faces Orthopaedic Headwinds
U.S. sales increased 8.3% to $4.95 billion, while international revenues rose 5.7% to $1.57 billion. Foreign currency had no impact on consolidated sales growth, while pricing contributed 0.1 percentage points.
Management highlighted slowing hip and knee procedures amid higher insurance premiums, deductibles and increased preauthorization denials. European and Middle Eastern markets also faced disruptions. Stryker estimated annual hip and knee market growth at approximately 2.5%, below historical levels.
Adjusted gross profit increased 8.5% to $4.27 billion. Adjusted gross margin expanded 40 basis points to 65.4%, benefiting from operational efficiencies and favorable tariff effects.
Adjusted selling, general and administrative expenses totaled $2.14 billion compared with $1.99 billion a year ago. Adjusted research, development and engineering expenses increased to $417 million from $398 million.
Adjusted operating income increased 10.1% to $1.71 billion. Adjusted operating margin expanded 60 basis points to 26.2%, reflecting improved gross profitability and disciplined expense management. Margin expansion helped mitigate the earnings impact of softer sales.
SYK's Cash Generation Supports Share Repurchases
Stryker ended the third quarter with $3.27 billion in cash and cash equivalents compared with $3.39 billion as of June-end.
Cumulative net cash provided by operating activities for the first nine months was $3.30 billion compared to $2.9 billion in the year-ago period. The company repurchased $1 billion of shares during the third quarter and received board authorization for an additional $3 billion in October.
Management reiterated that acquisitions remain its primary capital allocation priority. The company recently acquired ZuriMED and announced an investment in CMR Surgical, alongside an exclusive U.S. sales agreement for its Versius robotic platform.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker now expects full-year organic sales growth of 6.5-7.0%, down from its previous projection of 8.3-9.3%. Adjusted earnings are projected between $14.80 and $14.90 per share compared with the earlier guidance of $14.95-$15.10.
The revised outlook reflects weaker hip and knee procedures, lingering peripheral vascular supply constraints and greater caution around capital equipment deliveries. Management expects fourth-quarter organic growth broadly consistent with third-quarter performance, supported by Medical, Instruments and Trauma and Extremities.
Looking ahead to 2027, Stryker expects new product launches, including its power hip impactor, upgraded Neptune platform and AVS intravascular lithotripsy technology, to drive growth. Strong capital demand and an elevated order book remain favorable, although a recovery in joint replacement procedures remains uncertain.
Glaukos, sporting a Zacks Rank #1, reported third-quarter 2026 earnings per share of 47 cents, which beat the Zacks Consensus Estimate by 491.67%. Revenues of $211 million surpassed the Zacks Consensus Estimate by 24.99%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Becton, Dickinson and Company, currently carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $3.23, which beat the Zacks Consensus Estimate by 2.87%. Revenues of $4.98 billion surpassed the Zacks Consensus Estimate by 1.81%.
Becton, Dickinson and Company has an estimated long-term earnings growth rate of 1.1%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.94%.
Globus Medical, carrying a Zacks Rank of 2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.
View the Zacks #1 Rank List
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SYK Stock Skids as Q3 Earnings and Sales Miss & 2026 Outlook Cut
Key Takeaways
Stryker Corporation (SYK - Free Report) reported third-quarter 2026 adjusted earnings of $3.52 per share, up 10.3% year over year. The figure missed the Zacks Consensus Estimate of $3.56 by 1.1%. GAAP EPS declined 11.7% to $1.96.
Revenues were $6.52 billion, up 7.7% reportedly as well as organically. However, the sales missed the Zacks Consensus Estimate by 0.9%. Organic growth was supported by strong MedSurg demand and elevated capital equipment orders. However, weaker hip and knee procedures, commercial execution challenges and peripheral vascular supply constraints weighed on performance.
Following lower-than-expected sales and EPS amid Orthopaedic headwinds and disrupted commercial execution due to a cybersecurity incident and SAP implementation, Stryker lowered its outlook for 2026. Expectations of continued weakness weighed on investor sentiment, sending the stock down 11.8% in after-hours trading following the earnings release. The company’s shares have lost 11.3% in the year-to-date period compared with the industry’s 18.9% decline. The S&P 500 Index has risen 12.4% in the same time frame.
Image Source: Zacks Investment Research
Stryker's MedSurg Portfolio Sustains Momentum
MedSurg and Neurotechnology revenues increased 9.2% to $3.66 billion, with organic growth of 9.1%. Endoscopy sales climbed 13.9% to $1.02 billion, supported by operating room infrastructure investments and strong Sports Medicine demand.
Medical revenues rose 9.7% to $1.08 billion, driven by Sage, Smart Care and elevated capital demand. Instruments sales increased 5.1% to $996 million. Growth was partially offset by deferred neurosurgical equipment purchases ahead of the Sonopet 3 launch.
Vascular sales advanced 8.0% to $566 million, benefiting from one-time revenues associated with a regulatory milestone in China. However, manufacturing-related supply disruptions continued to constrain product availability. Management expects inventory levels to normalize through year-end.
SYK's Orthopaedics Growth Slows Amid Market Weakness
Orthopaedics revenues increased 5.7% to $2.86 billion, with organic growth of 5.9%. Knees sales rose 1.1% to $635 million, while Hips revenues declined 1% to $453 million. While Knees recorded 1.3% organic growth in the United States, Hips sales were down 0.6% organically.
Trauma and Extremities revenues increased 5.3% to $1.01 billion, supported by upper-extremity demand. Ortho Tech sales jumped 15.8% to $754 million, reflecting strong Mako robotic-system sales and orthopedic power-tool demand.
The first-quarter cybersecurity incident and July SAP implementation disrupted commercial execution. These challenges delayed adoption of Mako RPS and Triathlon Gold despite positive customer feedback. Management is strengthening sales execution to improve competitive conversions.
SYK's US Sales Growth Faces Orthopaedic Headwinds
U.S. sales increased 8.3% to $4.95 billion, while international revenues rose 5.7% to $1.57 billion. Foreign currency had no impact on consolidated sales growth, while pricing contributed 0.1 percentage points.
Management highlighted slowing hip and knee procedures amid higher insurance premiums, deductibles and increased preauthorization denials. European and Middle Eastern markets also faced disruptions. Stryker estimated annual hip and knee market growth at approximately 2.5%, below historical levels.
Stryker's Margins Improve Despite Revenue Pressure
Adjusted gross profit increased 8.5% to $4.27 billion. Adjusted gross margin expanded 40 basis points to 65.4%, benefiting from operational efficiencies and favorable tariff effects.
Adjusted selling, general and administrative expenses totaled $2.14 billion compared with $1.99 billion a year ago. Adjusted research, development and engineering expenses increased to $417 million from $398 million.
Adjusted operating income increased 10.1% to $1.71 billion. Adjusted operating margin expanded 60 basis points to 26.2%, reflecting improved gross profitability and disciplined expense management. Margin expansion helped mitigate the earnings impact of softer sales.
SYK's Cash Generation Supports Share Repurchases
Stryker ended the third quarter with $3.27 billion in cash and cash equivalents compared with $3.39 billion as of June-end.
Cumulative net cash provided by operating activities for the first nine months was $3.30 billion compared to $2.9 billion in the year-ago period. The company repurchased $1 billion of shares during the third quarter and received board authorization for an additional $3 billion in October.
Management reiterated that acquisitions remain its primary capital allocation priority. The company recently acquired ZuriMED and announced an investment in CMR Surgical, alongside an exclusive U.S. sales agreement for its Versius robotic platform.
Stryker Corporation Price, Consensus and EPS Surprise
Stryker Corporation price-consensus-eps-surprise-chart | Stryker Corporation Quote
Stryker Cuts 2026 Outlook on Procedural Weakness
Stryker now expects full-year organic sales growth of 6.5-7.0%, down from its previous projection of 8.3-9.3%. Adjusted earnings are projected between $14.80 and $14.90 per share compared with the earlier guidance of $14.95-$15.10.
The revised outlook reflects weaker hip and knee procedures, lingering peripheral vascular supply constraints and greater caution around capital equipment deliveries. Management expects fourth-quarter organic growth broadly consistent with third-quarter performance, supported by Medical, Instruments and Trauma and Extremities.
Looking ahead to 2027, Stryker expects new product launches, including its power hip impactor, upgraded Neptune platform and AVS intravascular lithotripsy technology, to drive growth. Strong capital demand and an elevated order book remain favorable, although a recovery in joint replacement procedures remains uncertain.
Zacks Rank & Stocks to Consider
Stryker currently has a Zacks Rank #4 (Sell).
Some stocks worth considering from the broader medical space are Glaukos (GKOS - Free Report) , Becton, Dickinson and Company (BDX - Free Report) and Globus Medical (GMED - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Glaukos, sporting a Zacks Rank #1, reported third-quarter 2026 earnings per share of 47 cents, which beat the Zacks Consensus Estimate by 491.67%. Revenues of $211 million surpassed the Zacks Consensus Estimate by 24.99%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Becton, Dickinson and Company, currently carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $3.23, which beat the Zacks Consensus Estimate by 2.87%. Revenues of $4.98 billion surpassed the Zacks Consensus Estimate by 1.81%.
Becton, Dickinson and Company has an estimated long-term earnings growth rate of 1.1%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.94%.
Globus Medical, carrying a Zacks Rank of 2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.