Stryker Earnings Miss, Lowers Full Year Outlook
Stryker third-quarter earnings missed and the company cut full-year sales and EPS guidance, pressuring shares and heightening near-term execution risk.
KEY TAKEAWAYS
- Stryker reported third-quarter sales of $6.5 billion and adjusted EPS of $3.52, both missing expectations.
- The company cut full-year organic sales growth to 6.5%-7.0% and trimmed adjusted EPS guidance to $14.80-$14.90.
- Management cited slower hip and knee procedures, peripheral-vascular supply constraints and capital-equipment execution risk.
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Stryker (SYK) reported third-quarter sales of $6.52 billion and adjusted diluted EPS of $3.52 in a press release on Oct. 29, 2026. Both results fell short of analyst expectations. The company lowered its full-year guidance, citing slower hip and knee procedures, peripheral-vascular supply constraints, and risks in capital-equipment execution.
Q3 Results and Guidance Revision
Stryker’s consolidated third-quarter net sales rose 7.7% year over year on both a reported and constant-currency basis. Adjusted net earnings reached about $1.4 billion, with adjusted diluted EPS increasing 10.3% year over year. Despite this growth, both figures missed analyst estimates.
The company revised its full-year 2026 organic net-sales growth guidance to 6.5%–7.0%, down from 8.3%–9.3%. It also trimmed adjusted diluted EPS guidance to $14.80–$14.90 from $14.95–$15.10. Stryker said foreign-exchange rates should slightly favor sales and adjusted EPS if current levels hold. The sales guidance includes a modestly positive pricing impact.
Management’s outlook assumes fourth-quarter organic growth roughly matching the third quarter and continued capital demand. However, it expressed increased caution about fulfilling certain equipment orders due to execution constraints. This cautious stance explains the lowered targets despite pricing and currency tailwinds.
Procedure Trends, Margins, and Capital Moves
Management attributed the guidance cut primarily to slower hip and knee procedure trends, ongoing peripheral-vascular supply constraints, and a more cautious view of capital-equipment execution.
By segment, MedSurg and Neurotechnology sales totaled $3.7 billion, up 9.2% reported and 9.1% organically. Orthopaedics revenue reached $2.9 billion, rising 5.7% reported and 5.9% organically.
Reported net earnings fell 12.3% year over year to $753 million, with reported diluted EPS down 11.7% to $1.96. On an adjusted basis, net earnings rose about 10.1%. Reported gross margin was 65.2%, and reported operating margin was 15.9%. Adjusted gross margin expanded 60 basis points to 65.4%, while adjusted operating margin increased to 26.2%.
Management highlighted continued expense discipline and margin expansion as partial offsets to softer procedure volumes and supply disruptions. These factors support the revised adjusted-EPS outlook.
During the quarter, Stryker repurchased $1.0 billion of common stock. In October, the board approved a $3.0 billion increase to the existing repurchase authorization, preserving capacity to support per-share metrics despite the guidance cut.
A secondary report indicated that Spencer Stiles will succeed Kevin Lobo as chief executive officer, though the effective date was not disclosed. Near-term 2026 results will depend on procedure volumes and the company’s ability to fulfill equipment demand amid execution risks.
"Our sales guidance includes a modestly positive pricing impact," Stryker said in the Oct. 29 release.
