Stryker (SYK) to Report Q3 Earnings: Is a Beat in Store?
Stryker Corporation SYK is scheduled to release third-quarter 2023 results on Nov 2, after market close. In the last reported quarter, the company delivered an earnings surprise of 6.72%.
Q3 Estimates
The Zacks Consensus Estimate for earnings is pegged at $2.44 per share, indicating an increase of 15.1% year over year.
The consensus mark for revenues is pinned at $4.88 billion, implying growth of 9% from the prior-year quarter’s reported figure.
Factors to Note
Stryker's MedSurg and Neurotechnology segment witnessed substantial sales growth on the back of robust performance of subsegments in the second quarter. Strong performances in Europe, Australia, Canada and Japan also boosted revenues. This trend is likely to have continued in the third quarter.
Growth across Orthopaedics & Spine’s Hip, Knee, and Trauma and Extremities subsegments might have favored the segment's performance on the back of continued procedural growth, strong uptake of the Insignia Hip Stem and the recent launch of Q Guidance Navigation System.
Stryker witnessed both domestic and international growth (in Japan, Korea and emerging markets) in the first half of 2023. It is committed to the sustained expansion of Mako, reflecting robust demand for this differentiated robotic technology. This heightened demand is likely to have contributed to the Orthopaedics & Spine segment's performance in the soon-to-be-reported quarter. However, variability in the hospital environment might have offset some of the gains.
The company’s prospects in 2023 seem promising on the back of strong customer demand for its existing as well as new products. However, ongoing hospital staffing pressures and foreign currency movements are likely to have hurt its sales growth.
Procedural volumes in China might have reflected recovery owing to the removal of lockdown restrictions across major cities in the country. However, the current inflationary pressure is likely to have hurt SYK’s net margin, thereby limiting its growth.
Stryker is working toward alleviating the rising inflationary pressure. It is also taking several cost-cutting initiatives, including restructuring plans. Although these steps may help boost the company’s growth, they are also likely to drive expenses in the upcoming quarters. On SYK’s third-quarter earnings call, investors are likely to question the progress of these strategic initiatives and their impact going forward.
SYK launched autonomous guidance systems, Ortho Q Guidance and Q Guidance system with Cranial Guidance software in the United States in July. On its third-quarter earnings call, the company provided updates on the launch progress for these two systems.
Stryker Corporation Price and Consensus
Stryker Corporation price-consensus-chart | Stryker Corporation Quote
Earnings Beat Likely
Our proven model predicts an earnings beat for Stryker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Stryker has an Earnings ESP of +0.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks to Consider
Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.
ShockWave Medical SWAV has an Earnings ESP of +6.07% and a Zacks Rank of 1 at present.
The stock has gained 0.6% year to date. SWAV’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 81.14%.
Baxter International BAX has an Earnings ESP of +3.86% and a Zacks Rank of 2 at present.
The stock has lost 36.9% year to date. BAX’s earnings missed estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 2.44%.
Avanos Medical AVNS has an Earnings ESP of +3.45% and a Zacks Rank of 3 at present.
The stock has lost 34.2% year to date. AVNS’ earnings missed estimates in the last reported quarter. It has a trailing four-quarter average negative earnings surprise of 0.61%.
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Baxter International Inc. (BAX) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
