Stryker (NYSE:SYK) today reported first-quarter results that exceeded Wall Street expectations, even in what CEO Kevin Lobo described as a “challenging macroeconomic environment.”
“We are encouraged by the steady improvement of surgery volumes and the robust demand for our capital products; however, we expect supply chain challenges to persist for much of the year,” Lobo said in the earnings news release posted this evening.
The Kalamazoo, Michigan–based orthopedic device giant earned $323 million, or 84¢ per share, off $4.275 billion in sales for the quarter ended March 31, 2022. The results represented 7% bottom-line growth and 8% top-line growth compared with Q1 2021.
Adjusted to exclude one-time items, earnings per share were $1.97, two pennies ahead of The Street, where analysts were looking for $1.95 earnings per share and $4.18 billion in sales.
Stryker now expects full-year 2022 organic net sales growth towards the high end of its guidance range of 6% to 8%.
But if foreign currency exchange rates stay at present levels, they’ll adversely impact full-year sales by roughly 1.2% and adjusted EPS by approximately 10¢ to 15¢. Add inflation and supply chain challenges to the mix, and Stryker now expects full-year EPS at the lower end of its $9.60 to $10.00 guidance.
Investors reacted the next day by sending SYK shares down more than 3% to $244.75 apiece by midday trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.
BTIG maintained its Buy rating on Stryker stock. The headline of their note read: “Some good, some bad, but guidance remains intact as supply chain challenges persist.”
Truist maintained a Hold rating, noting impressive, accelerating organic revenue growth but also margins and earnings per share limited by inflationary pressures.