“We delivered another quarter of strong organic sales growth,” Stryker Chair and CEO Kevin Lobo said in a news release out after market close yesterday. “We remain committed to our margin expansion goals and are excited about our product and M&A pipelines.”
Stryker soon followed today with the news that it has completed its acquisition of Molli Surgical and its wire-free soft tissue localization technology for breast-conserving surgery.
During Stryker’s earnings call, Lobo indicated that the company has a very active deal pipeline for even more M&A. Stryker’s already successful in orthopedic surgical robotics with its Mako systems — and more Mako indications expected later this year — so one potential deal could involve acquiring a soft-tissue surgical robotics company to branch out into other areas of robotic surgery.
Lobo said he and other Stryker officials like the idea of expanding into the soft tissue space, which is presently dominated by Intuitive.
According to the transcript on Seeking Alpha, Lobo went on to say:
“It’s complicated, and there is room for more than one big player, if you think about all the types of procedures that are done that are not done robotically. But we’re going to be cautious and careful about how we choose to enter. Fortunately for us, we’re not defending any business in this case. This would be all playing offense if we decide to move into that space. So we do like it. There are a lot of startups, as you know, that are in the space. We’ve looked at many. We haven’t pulled the trigger. I’m not going to predict if we will or if we won’t.”
Lobo also said Stryker will one day be in the fast-growing neuromodulation space, though when it came to offering more predictions he said, “stay tuned.”
SYK shares were down more than 1% to $326.56 apiece by midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — rose slightly.
Stryker had a Street-beating Q2, and raised its full-year guidance
The Portage, Michigan–based orthopedics and surgical technology giant earned $825 million, or $2.14 per share, off of $5.422 billion in revenue for the quarter that ended June 30, 2024. The top line was up 8.5% and the bottom line was up nearly 12% compared to the same quarter one year ago.
Adjusted to exclude one-time items, Stryker’s EPS was $2.81. The result was 2¢ ahead of the consensus of Wall Street analysts, who expected EPS of $2.79. Stryker also had a slight beat on revenue.
MedSurg and Neurotechnology revenue was up 9.0%, and Orthopaedics and Spine revenue was up 7.9%.
Stryker increased its full-year guidance to 9–10% organic sales growth and $11.90–12.10 adjusted EPS, up from the previous respective ranges of 8.5–9.5% and $11.85–12.05.
Mike Matson, senior research analyst at Needham & Co., said Stryker’s management was bullish on the call about the company’s prospects for the rest of the year, with the launches of its Pangea trauma systems and LifePak 35 monitor/defibrillator starting to contribute to revenue in Q3.
Matson kept Needham & Co.’s Buy rating on Stryker stock: “SYK saw broad-based strength across most of its businesses, driven by strong procedure growth, new product launches, and its capital equipment backlog.”
Medtech pay analysis: Stryker pay climbs for top execs and median worker as sales break $20B mark
