Stryker
(NYSE: SYK)
saw its Mako ortho surgical robot and new products drive a solid finish for 2023 — with expectations for a robust 2024.
The Kalamazoo, Michigan–based orthopedic device giant saw SYK shares shoot up more than 6% to $335.67 apiece in morning trading today on the heels of the Street-beating Q4 results from yesterday evening. MassDevice‘s MedTech 100 Index was up nearly 1%.
Stryker earned $1.143 billion, or $2.98 per share, from $5.815 billion in sales for the quarter ending Dec. 31, 2023. The bottom line more than doubled year over year, and the top line was up 11.8%.
Adjusted to exclude one-time items, Stryker’s EPS was $3.46. The result was 19¢ ahead of the consensus on Wall Street, where analysts expected EPS of $3.27 and revenue of $5.6 billion.
“We continue to be a high-growth company with a focus on our mission to deliver for our patients and customers,” Stryker CEO Kevin Lobo said during the company’s earnings call, transcribed by Seeking Alpha.
Lobo said Stryker has successfully capitalized on new product launches, including its System 9 surgical power tools, Neptune S waste management system, and next-gen 1788 minimally invasive surgical camera.
In addition, Stryker’s Mako robot in Q4 had a record number of installations globally. In the U.S., Stryker saw 60% of its knee replacements and 34% of its hips performed using Mako at the end of the year. Mako for spine surgery is coming in the third quarter of 2024, with Mako shoulder coming near the end of the year.
“As we begin 2024, I am very excited about our future. We are in a strong position with robust demand across both procedures and capital, easing macro constraints and a strong pipeline of innovation,” Lobo said.
In 2023, Stryker saw sales increase 11.1% to $20.5 billion, with adjusted EPS of $10.60. This year, Stryker expects sales to grow another 7.5–9.0%, with adjusted EPS of $11.70–12.00.
Lobo had plenty of positives to report at the start of 2024: “The procedure volumes are strong. The capital markets are very strong. Hospitals are spending. We have exited the year with more backlog than we began the year, which means, obviously, our orders are continuing to be strong for capital equipment.”
He added that Stryker is back to playing offense on the M&A front. “Expect us to be doing deals. We are open to larger deals. But our history would tell you that the vast majority of our deals are going to be smaller tuck-ins, but we can do many deals versus being very limited last year.”
Mike Matson, senior research analyst at Needham & Co., described the results as stellar, with tailwinds for the business increasing going into 2024. Truist analysts also considered the results impressive.
