The Gory Details on Stryker's Double Miss

Stryker (NYS: SYK) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Stryker missed slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased, and earnings per share grew significantly.

Gross margins shrank, operating margins dropped, net margins improved.

Revenue details
Stryker booked revenue of $2.2 billion. The 24 analysts polled by S&P Capital IQ predicted revenue of $2.2 billion. Sales were 11% higher than the prior-year quarter's $2 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.02. The 28 earnings estimates compiled by S&P Capital IQ forecast $1.02 per share on the same basis. GAAP EPS of $1.05 for Q4 were 41% higher than the prior-year quarter's $0.75 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 66.6%, 210 basis points worse than the prior-year quarter. Operating margin was 22.3%, 330 basis points worse than the prior-year quarter. Net margin was 18.1%, 330 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.1 billion. On the bottom line, the average EPS estimate is $0.99.

Next year's average estimate for revenue is $8.7 billion. The average EPS estimate is $4.10.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,445 members out of 1,476 rating the stock outperform, and 31 members rating it underperform. Among 479 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 469 give Stryker a green thumbs-up, and 10 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 $60.39.

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At the time this article was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Stryker. 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.

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