Stryker (NYSE:SYK) posted mixed fourth-quarter results, with the COVID-19 omicron variant pressuring elective procedure volumes in December.
The Kalamazoo, Michigan–based ortho device giant reported profits of $662 million, or $1.73 per share, on sales of $4.701 billion for the three months ended Dec. 31, 2021. The results, posted yesterday evening, represented a bottom-line gain of 16.5% and sales growth of 10.3% compared with Q4 2020.
Adjusted to exclude one-time items, earnings per share were $2.71, a penny behind The Street, where analysts were looking for EPS of $2.72 on sales of $4.61 billion.
Investor Relations VP Preston Wells told analysts yesterday evening that it wasn’t just omicron affecting procedure volumes: Ongoing nursing staffing shortages disrupted hospital scheduling. Hospital staffing challenges also delayed the installation of high-demand capital equipment from Stryker, and the company also had to grapple with raw materials shortages mostly related to electronics.
Stryker’s Mako robotic surgery systems, however, continue to drive growth. The global Mako installed base increased 27% in 2021 and is approaching 1,500 robots.
The company brought in $17.1 billion in revenues in 2021, up 19.2% from 2020 and 14.9% from 2019. Full-year earnings were $1.994 billion, or $5.21 per share, up 24.7% from 2020.
“Despite the impacts of the pandemic throughout the year, we were able to surpass $15 billion, $16 billion and $17 billion in revenue for the first time. And we remain confident in the outlook for our business as the pandemic recedes,” CEO Kevin Lobo said during the earnings call, transcribed by Seeking Alpha.
Stryker expects 2022 organic net sales growth to be in the range of 6–8%, with adjusted net earnings per diluted share in the $9.60 to $10 range.
“The volatility caused by COVID variants remains ongoing and is further impacted by hospital staffing challenges and supply chain disruptions. Despite this, we expect to continue to deliver above-market sales growth,” Lobo said.
“However, given the pressures on our supply chain within MedSurg, we do not expect to deliver our typical degree of earnings leverage. We continue to be disciplined with our spending. However, we will continue to fuel new products with healthy R&D spending and will maintain our focus on above-market growth while we work through these cost pressures.”
Investors reacted by sending SYK shares down more nearly 2% to $240.67 apiece during morning trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up slightly.