What was Stryker's revenue growth in the third quarter of 2018?

Stryker Corporation's consolidated net sales increased by 7.9% to $3.242 billion in the third quarter of 2018 compared to the same period in 2017. This growth was driven by increases across all segments, with Neurotechnology and Spine showing particularly strong performance.

How did Stryker's profitability change in the third quarter and year-to-date?

Profitability improved significantly. For the third quarter of 2018, operating income increased by 9.7% and net earnings rose by 35.9% to $590 million, leading to a 36.0% increase in diluted EPS to $1.55. For the first nine months, operating income grew 16.2% and net earnings increased 17.0%, with diluted EPS up 16.8%.

What are the key strategic moves Stryker made or announced during this period?

Stryker completed two strategic acquisitions: Entellus Medical in February 2018 and NOVADAQ Technologies in September 2017 (with purchase price allocation completed in 2018). Additionally, in August 2018, Stryker announced a definitive agreement to acquire K2M Group Holdings, Inc. for approximately $1.4 billion, further strengthening its position in the spine market. These acquisitions are aimed at expanding the company's portfolio and market reach.

What impact did recall charges have on the results?

Recall charges decreased substantially, from $66 million in Q3 2017 to $4 million in Q3 2018. This significant reduction, primarily related to the Rejuvenate and ABG II hip stem recalls, had a positive impact on operating income and net earnings for the period.

SYK 10-Q Quarterly Report Q3 FY2018 — Revenue, Net Income, EPS

Summary

Stryker Corporation reported strong financial results for the third quarter and the first nine months of 2018, demonstrating robust top-line growth driven by its key segments. Net sales increased by 7.9% for the quarter and 9.3% year-to-date, with notable strength in the Neurotechnology and Spine segment, which saw 16.7% and 17.4% growth respectively. The company also reported significant improvements in profitability, with operating income up 9.7% for the quarter and 16.2% year-to-date. This improved operational performance, coupled with a reduction in recall charges, led to a substantial increase in net earnings and diluted EPS. Stryker continues to invest in growth through strategic acquisitions, having completed the acquisitions of Entellus Medical and NOVADAQ Technologies, and announcing its intent to acquire K2M Group Holdings. These strategic moves are aimed at expanding its product portfolio and market reach, particularly in the high-growth Neurotechnology and Spine segments. Despite some headwinds from foreign currency fluctuations and the adoption of new revenue recognition standards, the company is well-positioned for continued growth, supported by strong operational execution and a disciplined approach to capital deployment.

Financial Highlights

51 data points

Beta

Revenue

$3.24B

0.7% Gross Margin

Net Income

$590.00M

0.2% Net Margin

EPS (Diluted)

$1.55

Total Assets

$22.08B

Cash & Equivalents

$1.92B

Free Cash Flow

$478.00M

Financial Statements

Beta

Revenue	$3.24B
Cost of Revenue	$1.09B
Gross Profit	$2.15B
R&D Expenses	$221.00M
SG&A Expenses	$1.24B
Operating Expenses	$1.58B
Operating Income	$576.00M
Net Income	$590.00M
EPS (Basic)	$1.58
EPS (Diluted)	$1.55
Shares Outstanding (Basic)	374.10M
Shares Outstanding (Diluted)	380.20M

Key Highlights

1Net sales increased by 7.9% to $3.242 billion in Q3 2018 and by 9.3% to $9.805 billion for the first nine months of 2018, compared to the prior year periods.
2Operating income grew by 9.7% in Q3 2018 and 16.2% for the first nine months of 2018, demonstrating improved operational efficiency and profitability.
3Diluted earnings per share (EPS) rose significantly to $1.55 in Q3 2018 and $3.90 for the first nine months of 2018, up 36.0% and 16.8% respectively.
4The Neurotechnology and Spine segment showed exceptional growth, with sales up 16.7% in Q3 and 17.4% year-to-date, highlighting strong demand in this area.
5Stryker announced significant strategic acquisitions, including K2M Group Holdings for approximately $1.4 billion, and completed the acquisitions of Entellus Medical and NOVADAQ Technologies, bolstering its product offerings.
6Recall charges decreased dramatically by 93.9% in Q3 2018 to $4 million, significantly contributing to the improved net earnings.
7The company maintained a strong liquidity position with $1.918 billion in cash and cash equivalents as of September 30, 2018.

STRYKER CORP Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions