Stryker stock slips on Q3 earnings miss, full-year guidance downgrade

Shares of Stryker stock slipped today after the company downgraded its full-year outlook and announced third-quarter operating results that missed Wall Street’s expectations.

The Kalamazoo, Michigan–based orthopedic device maker posted profits of $438 million, or $1.17 per diluted share, on sales of $4.16 billion for the three months ended Sept. 30, 2021, resulting in a bottom-line decrease of 29.5% compared to this time last year. Sales were up 11.3%.

Adjusted to exclude one-time items, earnings per share were $2.20, 8¢ short of the Wall Street consensus forecast, where analysts were looking for adjusted EPS of $2.28 on sales of $4.23 billion.

Stryker, like many of its peers, reported continued headwinds from the COVID-19 pandemic, particularly the Delta variant wave that forced American hospitals to prioritize critical cases and push back elective surgeries.

“This latest spike mostly impacted our U.S. implant-related businesses as scheduled procedures were deferred,” Stryker Chair and CEO Kevin Lobo said in a news release. “Despite those impacts, we delivered strong growth in our MedSurg and NeuroTech businesses and are ready to support our customers as the pandemic recedes.”

Orthopedic sales grew 16.1% compared to Q3 2020. MedSurg sales increased 9.4% in that same time, and Neurotechnology and Spine sales grew 7.3%.

Stryker downgraded its full-year outlook, citing COVID-19 pandemic volatility and healthcare staffing as challenges to a faster recovery.

Medical device makers like Medtronic and Johnson & Johnson have warned of hospital worker burnout, and Intuitive Surgical last week said it has heard varying levels of reassurance from hospitals.

Stryker offered new guidance for 2021 organic net sales growth in the range of 7% to 8% from 2019 (chosen by Stryker as a pre-pandemic comparison), down from the guidance of 9% to 10% that Stryker issued after Q2.

Stryker’s adjusted EPS outlook similarly decreased to a range of $9.08 to $9.15, down from the previous outlook of $9.25 to $9.40. (Both estimates include the full-year impact of the Wright Medical acquisition.)

Stryker stock was down about 3% in after-hours trading, with shares trading for around $259.50. MassDevice