Stryker Posts Mixed Bag Q4 Earnings, Issues FY22 Guidance Below Consensus

Stryker Corp SYK posted Q4 adjusted EPS of $2.71, down 3.6% Y/Y, missing the consensus of $2.72.

• "We delivered a strong year of financial results, despite the ongoing challenges of the pandemic," said Kevin Lobo, Chair & CEO. "Organic sales growth of over 7% versus 2019, coupled with double-digit adjusted EPS growth and excellent cash flow performance were all noteworthy achievements, as was the excellent integration of Wright Medical."
• Consolidated net sales of $4.7 billion increased 10.3% Y/Y (11.1% in constant currency), beating the estimate of $4.65 billion.
• Organically, sales were up 6.2%, including 7.9% from the higher unit volume, partially offset by 1.7% from lower prices, versus the 2019 quarter.
• MedSurg and Neurotechnology segment clocked net sales of $2.64 billion, +8.7% Y/Y (+9.2% organic).
• Orthopedics & Spine sales reached $2.06 billion, up 12.5% Y/Y (+8.7% organically).
• The adjusted gross margin increased marginally to 65.8% from 65.1% posted a year ago. The operating margin declined from 29.2% to 27.3%.
• Guidance: Stryker notes short-term outlook remains volatile based on the assessment of the impact of the pandemic on its operations and the external environment.
• Stryker expects FY22 organic net sales growth of 6% - 8% and adjusted EPS of $9.60 - $10.00, compared to the consensus of $10.14. 
• The company expects continued unfavorable price reductions of approximately 1% in 2022. 
• If foreign exchange rates hold near their current levels, Stryker anticipates sales and EPS will be modestly unfavorably impacted compared to 2021.
• Price Action: SYK shares closed lower by 1.18% at $245.33 on Thursday.