Stryker Q3 Earnings Miss Expectations, Downgrades FY21 Guidance

Stryker Corp SYK posted Q3 adjusted EPS of $2.20, +2.8% Y/Y, missing the consensus of $2.28.
Stryker reported continued headwinds from the COVID-19 pandemic, particularly the Delta variant wave, forcing American hospitals to prioritize critical cases and push back elective surgeries.
Consolidated net sales of $4.16 billion increased 11.3% Y/Y and 10.7% in constant currency from 2020, missing the estimate of $4.24 billion.
Organically, sales were up 4.5%, including 5.2% from the higher unit volume, partially offset by 0.7% from lower prices.
Orthopedics sales of $1.5 billion increased 16.1% (decreased 1.8% organically).
MedSurg segment clocked net sales of $1.9 billion, +9.4% (+8.8% organic)
Neurotechnology and Spine sales increased 7.3%% to $0.9 billion, +6.1% organic).
The adjusted gross margin expanded from 65.9% to 66.3%, and the operating margin declined from 28.0% to 25.4%.
Guidance: Stryker downgraded its FY21 outlook, citing COVID-19 pandemic volatility and healthcare staffing.
Stryker offered new guidance for FY21 organic net sales growth of 7% - 8% from 2019, down from the guidance of 9% to 10% issued after Q2.
Stryker’s adjusted EPS outlook decreased to $9.08 - $9.15 (lower than consensus of $9.30), down from the previous outlook of $9.25 - $9.40.
Price Action: SYK shares closed 4.26% lower at $257 during after-hours on Thursday.

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