Stryker (NYSE:SYK) beat expectations as its 3rd-quarter earnings soared nearly 430% and raised the low end of its outlook for the rest of the year.
Kalamazoo, Mich.-based Stryker posted profits of $301 million, or 79¢ per share, on sales of $2.42 billion for the 3 months ended Sept. 30. That amounts to bottom-line growth of 428.1% on sales growth of 1.3% compared with Q3 2014.
Adjusted to exclude 1-time items, profits were up 8.4% to $476 million, or $11.25 per share – 2¢ ahead of expectations on Wall Street, where analysts were looking for sales of $2.44 billion.
“We delivered another solid quarter with organic sales again exceeding 5%, putting us on pace to achieve our sales and adjusted EPS targets for 2015,” chairman & CEO Kevin Lobo said in prepared remarks. “I am pleased with our disciplined execution as we work with our customers to make healthcare better.”
Stryker boosted the lower end of its outlook for the rest of the year, saying it now expects to report adjusted EPS of $5.07-$5.12, up from prior guidance of $5.06-$5.12. Organic sales growth is still pegged at 5.5% to 6.5%, the company said.
During a conference call with analysts, Lobo said mergers & acquisitions are still #1 on Stryker’s list, despite having closed fewer deals this year.
“We haven’t closed very many deals, at least, not as many this year as we have in the past couple of years. But that’s not a function of lack of targets. It’s just making sure that the valuations work, and that the deals are going to be value-creating for Stryker,” he said, according to a Seeking Alpha transcript. “M&A is difficult to predict in terms of timing, but we do feel that there are a significant number of attractive targets out there and our teams continue to work on that. And that does continue to be our 1st priority in terms of using cash.”