How much of the earnings growth is from underlying operations versus one-time items?

Adjusted EPS grew 17.9%, compared with 44.1% growth in reported EPS. The gap reflects a $158 million pre-tax tariff reversal tied to 2025 costs, which boosted reported results but is excluded from adjusted figures. Lower prior-year impairments and acquisition-related charges also make the reported comparison look stronger than the operating trend.

Is Stryker's growth broad-based across its segments?

Growth was broad. MedSurg and Neurotechnology grew 9.2% organically, led by Medical (up 12.6% in the U.S.), Endoscopy and Instruments. Orthopaedics grew 8.6% organically, led by Trauma and Extremities and Ortho Tech, while Hips grew only about 3% and Spinal Implants sales were essentially eliminated, with U.S. sales falling to zero.

What is the outlook for the rest of 2026?

Management narrowed guidance to organic sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10. The company expects a modestly positive pricing contribution and a slightly favorable foreign exchange effect if current rates hold. The company also said it could not reliably forecast the timing and size of special charges, acquisition costs, and regulatory, legal and tax outcomes, which could be material.

How is Stryker's cash position and balance sheet changing?

Operating cash flow for the first six months rose to $1.84 billion from $1.36 billion. The company repaid $750 million of debt and paid $674 million in dividends, which reduced cash to $3.39 billion from $4.01 billion at year-end 2025. Long-term debt fell to $14.19 billion from $14.86 billion, and shareholders' equity rose to $23.99 billion.

What risks remain from the cybersecurity incident and other legal matters?

The company says it is recovering from the cyber incident first reported on March 11, 2026, and the filing lists ongoing risks including the ultimate cost of recall-related and regulatory matters, legal proceedings, and possible further disruption to information systems. Structural optimization charges were $213 million for the six months, mainly from sales relationship terminations and other charges, which suggests restructuring costs remain elevated.

SYK 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 30, 2026. Cited figures are marked; the original filing is the authoritative source.

Stryker reported second quarter 2026 results that showed a strong rebound from the cybersecurity incident first disclosed on March 11, 2026.

Net sales rose 9.4% to $6.6 billion^a, with organic growth of 9.0% driven by unit volume. MedSurg and Neurotechnology grew 9.7% reported (9.2% organic), and Orthopaedics grew 9.1% reported (8.6% organic). Reported EPS increased 44.1% to $3.30, and adjusted EPS increased 17.9% to $3.69.

Adjusted operating margin expanded 170 basis points to 27.4%, while reported operating margin reached 25.2%. The headline earnings growth is flattered by low-quality items that investors should separate from the underlying trend. Reported results include a $158 million^b pre-tax benefit from the reversal of 2025 tariffs, which is excluded from adjusted figures and contributed roughly $0.34 per diluted share.

Prior-year results also carried larger impairment and acquisition-related charges, which makes the year-over-year reported comparison look more favorable than the operating trend. Structural optimization and other special charges were $95 million^c in the quarter, mostly in the 'other charges' category, and the company's effective tax rate on a reported basis was 18.4%. Management narrowed full-year 2026 guidance to organic net sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10, and it expects a modestly positive pricing impact and a slightly favorable foreign exchange effect if rates hold.

Six-month operating cash flow improved to $1.84 billion^d from $1.36 billion, and the company repaid $750 million of debt, though cash declined to $3.39 billion. Investors should monitor the pace of the cyber recovery in the second half, the durability of the tariff-related and tax benefits, and the ultimate cost of recall, regulatory and legal matters that the company flagged as uncertain.

02—Key points

Key Highlights

Net sales rose 9.4% to $6.6 billion (9.0% constant currency, 9.0% organic), driven by increased unit volume across segments.
Adjusted operating margin expanded 170 bps to 27.4%, while reported operating margin was 25.2%, up from 18.5% a year earlier.
Reported diluted EPS rose 44.1% to $3.30; adjusted diluted EPS rose 17.9% to $3.69, excluding acquisition, amortization, restructuring and tax items.
Reported results include a $158 million pre-tax benefit from reversing 2025 tariffs (about $0.34 per share), which is excluded from adjusted EPS.
2026 guidance narrowed to organic sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10, with a modestly positive pricing impact.
Six-month operating cash flow increased to $1.84 billion from $1.36 billion, while the company repaid $750 million of net debt and acquisition spending fell to $459 million from $4.8 billion.
Management cited the recovery from the March 2026 cybersecurity incident as the central operational theme, with the company expecting to grow at the high end of MedTech.

03—Questions

Frequently Asked Questions

How much of the earnings growth is from underlying operations versus one-time items?
Adjusted EPS grew 17.9%, compared with 44.1% growth in reported EPS. The gap reflects a $158 million pre-tax tariff reversal tied to 2025 costs, which boosted reported results but is excluded from adjusted figures. Lower prior-year impairments and acquisition-related charges also make the reported comparison look stronger than the operating trend.
Is Stryker's growth broad-based across its segments?
Growth was broad. MedSurg and Neurotechnology grew 9.2% organically, led by Medical (up 12.6% in the U.S.), Endoscopy and Instruments. Orthopaedics grew 8.6% organically, led by Trauma and Extremities and Ortho Tech, while Hips grew only about 3% and Spinal Implants sales were essentially eliminated, with U.S. sales falling to zero.
What is the outlook for the rest of 2026?
Management narrowed guidance to organic sales growth of 8.3% to 9.3% and adjusted EPS of $14.95 to $15.10. The company expects a modestly positive pricing contribution and a slightly favorable foreign exchange effect if current rates hold. The company also said it could not reliably forecast the timing and size of special charges, acquisition costs, and regulatory, legal and tax outcomes, which could be material.
How is Stryker's cash position and balance sheet changing?
Operating cash flow for the first six months rose to $1.84 billion from $1.36 billion. The company repaid $750 million of debt and paid $674 million in dividends, which reduced cash to $3.39 billion from $4.01 billion at year-end 2025. Long-term debt fell to $14.19 billion from $14.86 billion, and shareholders' equity rose to $23.99 billion.
What risks remain from the cybersecurity incident and other legal matters?
The company says it is recovering from the cyber incident first reported on March 11, 2026, and the filing lists ongoing risks including the ultimate cost of recall-related and regulatory matters, legal proceedings, and possible further disruption to information systems. Structural optimization charges were $213 million for the six months, mainly from sales relationship terminations and other charges, which suggests restructuring costs remain elevated.

04—Continue

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