Stryker’s 1Q16 Results Exceeded Analysts’ Estimates

1Q16 takeaways

On April 20, 2016, Stryker (SYK) released its 1Q16 earnings. After the announcement, Stryker’s share price rose marginally by ~1% from 109.73 on April 19, 2016. The company’s reported revenue and earnings exceeded analysts’ estimates.

In 1Q16, Stryker earned revenue of ~$2.5 billion. It registered growth of ~5% on a YoY (year-over-year) basis. It exceeded analysts’ estimates by 0.8%. The company registered adjusted EPS (earnings per share) of $1.24. It exceeded the consensus earnings estimate of $1.20.

The decline in revenue included the impact of -1.3% attributable to foreign exchange. The company’s operating revenue rose by ~6.1%. All of the business segments reported growth in reported revenue. The highest revenue increase was reported by the Neurotechnology and Spine segment at 12%. It was followed by MedSurg sales growth of 3.4%. The Orthopedics segment registered revenue growth of 3.3%.

Stryker’s peers such as Zimmer Biomet Holdings (ZBH), Becton Dickinson (BDX), and Baxter International (BAX) are expected to earn revenue of about $1.9 billion, $3.1 billion, and $2.4 billion, respectively, for the quarter ending March 31, 2016.

Earnings results

Stryker reported net earnings of ~$402 million. It registered growth of ~79.5%. The net EPS was reported at $1.07. This represents growth of around 84.5%. The reported earnings include the impact of charges related to the intangible asset amortization, recall of Rejuvenate and ABGII, other legal expenses, and restructuring and acquisition-related expenses. The adjusted net earnings were around $468 million. It represented growth of around 10.4% YoY.

Strong sales and earnings were led by new product launches and the execution of various commercial initiatives to improve sales and marketing activities. The focus was on specialized business units and continued investment in research and development.

To learn more about Stryker, read A Must-Read Company Overview of Stryker.

Investors interested in Stryker can invest in the SPDR S&P 500 ETF (SPY). SPY has ~0.19% of its total holdings in Stryker.