SYK · Stryker Corporation

Stryker's Q1 2026 results showed modest top-line growth with reported net sales up 2.6% to $6.0 billion and organic growth of 2.4%, primarily from increased unit volume (2.1%) and slight pricing (0.3%). MedSurg and Neurotechnology drove performance with 5.0% reported growth to $3.2 billion (3.6% constant currency, 0.9% organic), fueled by strong Vascular (27.5% reported) and Instruments (9.9%) segments. Orthopaedics sales were flat at 0.1% reported ($2.8 billion), down 1.8% constant currency but up 4.1% organically, with gains in Trauma/Extremities (9.5%) offset by Spinal Implants divestiture impact. CEO Kevin Lobo highlighted quick recovery from a March 2026 cyber incident, underscoring resilient business momentum. Margin pressures were evident: reported operating margin expanded to 15.5% from 14.3%, but adjusted margin contracted 180 bps to 21.1%, reflecting acquisition/integration costs, amortization, and special charges. Reported EPS rose 14.2% to $1.93 on 13.9% net earnings growth to $745 million, while adjusted EPS fell 8.5% to $2.60. Balance sheet remains solid with $2.9B cash, though down from year-end; operating cash flow improved sharply to $581M from $250M. A key structural change combined orthopaedic instruments and Mako/enabling tech into Ortho Tech to streamline customer experience and accelerate innovation, with recast prior data available on IR site. Management reaffirmed FY2026 outlook for 8.0-9.5% organic sales growth and $14.90-$15.10 adjusted EPS, signaling confidence despite Q1 adjusted earnings decline and forex tailwinds expected.