Stryker Posts 7.7% Organic Growth but Says Quarter Fell Short of Expectations

Stryker said Thursday that its third-quarter results fell short of its own expectations even as organic sales grew 7.7% and adjusted earnings per share rose 10.3%, according to the earnings release the medical technology company filed with an 8-K after the market close.

"While, in absolute terms, this reflected good overall performance, it did fall short of our expectations," Chair and CEO Kevin A. Lobo said in the release. He added that the underlying fundamentals of the business "remain strong" and that the company expects "a solid performance in Q4 and good momentum heading into 2027."

Updated outlook

Stryker updated its full-year 2026 guidance and now expects organic net sales growth of 6.5% to 7.0% and adjusted diluted EPS of $14.80 to $14.90. The release said the sales outlook includes a modestly positive pricing impact and that foreign exchange should be slightly favorable to both sales and adjusted EPS if rates hold near current levels.

Net sales rose 7.7% to $6.52 billion from $6.06 billion, on both a reported and constant-currency basis, mainly from higher unit volume. Adjusted EPS increased to $3.52, and the adjusted operating margin widened 60 basis points to 26.2%.

Impairment charges hit reported profit

On a reported basis, net earnings fell 12.3% to $753 million, and diluted EPS declined 11.7% to $1.96 from $2.22. The reported operating margin narrowed to 15.9% from 18.7%.

Goodwill and other impairments rose to $293 million in the quarter from $73 million a year earlier, according to the company's statement of earnings. Income taxes climbed to $244 million from $170 million. Reported gross margin improved to 65.2% from 63.6%.

MedSurg outpaces Orthopaedics

The MedSurg and Neurotechnology segment grew net sales 9.2% to $3.7 billion, with organic growth of 9.1%. Endoscopy sales rose 13.9% to $1.02 billion, Medical sales rose 9.7% to $1.08 billion, and Vascular sales increased 8.0% to $566 million.

Orthopaedics net sales increased 5.7% to $2.9 billion, or 5.9% in constant currency. The Ortho Tech business, created in a first-quarter reorganization, grew 15.8% to $754 million, and Trauma and Extremities rose 5.3% to $1.01 billion. Knee sales edged up 1.1% to $635 million, while hip sales slipped 1.0% to $453 million.

Buybacks expanded

Stryker repurchased $1.0 billion of its common stock in the third quarter. In October, its board approved a $3.0 billion increase to the existing share repurchase program, the company said.

For the first nine months of the year, net sales grew 6.6% to $19.13 billion, and operating cash flow rose to $3.30 billion from $2.90 billion. Cash and cash equivalents stood at $3.27 billion at Sept. 30, compared with $4.01 billion at the end of 2025.

Stryker scheduled a conference call for 4:30 p.m. ET on Thursday to discuss the results.

Sources

1. Stryker Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0000310764-26-000059)

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