- Stryker on Tuesday reported fourth-quarter net sales climbed 9.4% to $3.8 billion, driven by particularly strong unit volume in its MedSurg business. Revenue topped the Wall Street consensus forecast by $60 million, while adjusted earnings per share of $2.18 exceeded an average analyst forecast.
- Organic net sales growth of 8.6% was the fastest pace for the company in a decade and reflected strength across Stryker’s product portfolio, according to analysts.
- Stryker forecasted fiscal 2019 organic revenue growth of 6.5% to 7.5% and EPS of $8.00 to $8.20, up 10% to 12%. Shares rose about 8% in mid-morning trade.
Wall Street largely applauded the results, which include a 2019 organic sales growth forecast in the range of 6.5% to 7.5%, representing its highest revenue growth outlook in a decade.
CEO Kevin Lobo told analysts on a call the three largest divisions within MedSurg — endoscopy, instruments and medical — posted growth rates of 9% to 12% in the quarter with support from a steady flow of new product launches. In the company’s other businesses, organic sales increased 8.4% in neurotechnology and spine, and rose 7% in orthopaedics.
Stryker also highlighted an especially strong performance for its Mako robotically-assisted surgical system, reporting that 54 robots were installed globally in the fourth quarter. A total of 642 robots are now installed around the globe. Total knee procedures represented about 60% of all U.S. Mako procedures in 2018, the company said.
“Overall, it's vintage Stryker with a well-balanced result and more to come,” Jefferies Raj Denhoy wrote. He did call neurotechnology "a little softer and Spine still weak," but predicted those short-term issues.
Stryker will soon face direct competition in robotically-assisted knee surgeries. Longtime rival orthopaedics device maker Zimmer Biomet announced on Friday that it received FDA 510(k) clearance for its Rosa Knee robotic platform.
Officials touted itself as well-positioned to drive Mako sales in 2019, having exited last year with a healthy order pipeline for the robot. The company said it will continue to build its clinical data supporting Mako as it reaches the two-year anniversary of the launch of the knee application this quarter.
Overall in the fourth quarter, Stryker earned $2.07 billion, or $5.44 a share, compared to a loss of $249 million, or 66 cents a share, in the year-ago period. Adjusted for one-time items, Stryker earned $2.18 a share in the quarter, compared with $1.96 a share a year ago.