Stryker (NYSE:SYK) shares are up today — a day after it boosted revenue growth projections while reporting Q2 results that were shy of the consensus forecast.
Shares of SYK were up more than 1% to $207.68 apiece by midday trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up slightly.
The Kalamazoo, Michigan-based company yesterday evening posted profits of $656 million, or $1.72 per share, on sales of $4.49 billion for the three months ended June 30, 2022, for a 10.8% bottom-line gain on sales growth of 4.6%.
Adjusted to exclude one-time items, earnings per share were $2.25, 4¢ behind Wall Street, where analysts were looking for sales of $4.53 billion.
Stryker brought in $2.5 billion in revenues through its medsurg and neurotechnology business for an 8% year-over-year gain. Orthopaedics and spine netted sales of $1.9 billion for a 0.5% increase on the quarter.
“Despite supply shortages, we delivered solid organic sales growth in Q2,” Stryker Chair and CEO Kevin A. Lobo said in a news release. “Negative foreign currency and inflation, including spot buys of materials pressured our adjusted earnings. We are confident in our full-year outlook for revenue; however, we are expecting continued adjusted EPS challenges due to worsening foreign exchange and other macroeconomic conditions.”
With a strong order book for capital equipment and implant sales momentum, Stryker now projects organic sales growth between 8% and 9% for the year, up from a previous 6% to 8% guidance. It now expects to log adjusted EPS of between $9.30 and $9.50 per share, whereas it had previously projected full-year EPS to come in at the lower end of a $9.60 to $10.00 range.
“Overall, the optics of lowered EPS guidance may not sit well with some, but we think given SYK’s confidence in its capital order book and raised top-line guidance coupled with its ability to work through increasing operational pressures (i.e. not pass as much through to the EPS line) mitigate the impact of the lowered EPS guidance,” BTIG analyst Ryan Zimmerman wrote in a report.
This story originally ran on the evening of July 26, 2022. Updated July 27 with the next-day stock price.