By
Brian Orelli
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October 17, 2008
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When is a 20% gain in earnings per share not enough to boost a company's stock in this market? When investors were expecting just a little more.
Stryker (NYSE: SYK ) is trading down today, as its $0.66 earnings per share just missed analysts' consensus. Panicking investors have quick trigger fingers. Never mind that they thought the stock was worth 20% more near the beginning of September and the company has again proven that it can post double-digit sales growth in an unstable market.
Sales of Stryker's orthopedic implants jumped 12%, boosted by implants for trauma and spine patients, both of which saw sales increase more than 20% year over year. Sales of implants for reconstructive surgeries in general have remained strong -- Johnson & Johnson's (NYSE: JNJ ) DePuy saw sales jump 10% in the third quarter -- which bodes well for Zimmer (NYSE: ZMH ) and Smith & Nephew (NYSE: SNN ) , which have yet to release third-quarter numbers.
Stryker's slightly smaller medical and surgical equipment sales business is doing even better, with sales exceeding a 16% year-over-year increase. From hospital beds to surgical equipment, Stryker has what hospitals need.
No matter what the economic conditions, people are going to get sick and hospitals are going to need to buy Stryker's products. Yes, some orthopedic procedures can be considered elective -- if the patient is willing to put off the reconstructive surgery and deal with the pain. But, as Intuitive Surgical (Nasdaq: ISRG ) CEO Lonnie Smith pointed out in last night's conference call, we could actually see people moving up surgeries because they're worried about not having health insurance in the future.
Stryker may have missed with earnings, but with 31 consecutive quarters of double-digit growth, it's proven that it’s a winner over the long haul. Investors looking for a consistent company trading lower can find it in Stryker.
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