The 10-second takeaway
For the quarter ended June 30 (Q2), Stryker met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew slightly. GAAP earnings per share shrank significantly.
Margins dropped across the board.
Stryker reported revenue of $2.21 billion. The 26 analysts polled by S&P Capital IQ wanted to see a top line of $2.19 billion on the same basis. GAAP reported sales were 5.0% higher than the prior-year quarter's $2.11 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.00. The 29 earnings estimates compiled by S&P Capital IQ predicted $1.03 per share. Non-GAAP EPS of $1.00 for Q2 were 2.0% higher than the prior-year quarter's $0.98 per share. GAAP EPS of $0.56 for Q2 were 34% lower than the prior-year quarter's $0.85 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.0%, 120 basis points worse than the prior-year quarter. Operating margin was 13.5%, 910 basis points worse than the prior-year quarter. Net margin was 9.6%, 580 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.14 billion. On the bottom line, the average EPS estimate is $1.00.
Next year's average estimate for revenue is $8.96 billion. The average EPS estimate is $4.26.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,424 members out of 1,456 rating the stock outperform, and 32 members rating it underperform. Among 444 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 437 give Stryker a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Stryker is outperform, with an average price target of $68.44.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.