Stryker Increases Sales but Misses Estimates on Earnings

Stryker (NYSE: SYK  ) reported earnings on July 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Stryker met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew slightly. GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Stryker reported revenue of $2.21 billion. The 26 analysts polled by S&P Capital IQ wanted to see a top line of $2.19 billion on the same basis. GAAP reported sales were 5.0% higher than the prior-year quarter's $2.11 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.00. The 29 earnings estimates compiled by S&P Capital IQ predicted $1.03 per share. Non-GAAP EPS of $1.00 for Q2 were 2.0% higher than the prior-year quarter's $0.98 per share. GAAP EPS of $0.56 for Q2 were 34% lower than the prior-year quarter's $0.85 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 67.0%, 120 basis points worse than the prior-year quarter. Operating margin was 13.5%, 910 basis points worse than the prior-year quarter. Net margin was 9.6%, 580 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.14 billion. On the bottom line, the average EPS estimate is $1.00.

Next year's average estimate for revenue is $8.96 billion. The average EPS estimate is $4.26.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,424 members out of 1,456 rating the stock outperform, and 32 members rating it underperform. Among 444 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 437 give Stryker a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Stryker is outperform, with an average price target of $68.44.

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