Why Stryker Updated 2017 Guidance during 2Q17 Earnings Release



2017 guidance

Stryker (SYK) expects the company’s 2017 revenue to witness a YoY (year-over-year) rise of 6.5%–7% on an organic basis. Currency headwinds are expected to have a negative impact of around 0.5% on 2017 sales. Notably, the previous sales guidance range for 2017 was 5.5%–6.5%.

SYK’s acquisition of Novadaq Technologies is also expected to contribute to Stryker’s 2017 sales. For more on the acquisition details. The Novadaq acquisition is expected to turn accretive to Stryker’s earnings.

Stryker expects to see 2017 EPS (earnings per share) in the range of $6.45–$6.55, which is also higher than the previous 2017 EPS guidance range of $6.35–$6.45. The negative foreign exchange impact is expected to be around $0.1, compared to the previous range of $0.1–$0.12.

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Quarterly guidance

Stryker is expected to deliver strong sales as well as earnings performance in 3Q17 revenues, driven by the company’s strong product pipeline, robust product launches and approvals, momentum in MAKO sales, and strategic acquisitions and collaborations. For recent developments in the company, read Stryker’s Recent Developments Strengthen Its Market Position.

The company’s adjusted EPS guidance for 3Q17 is in the range of $1.50–$1.55, compared to $1.48 in 1Q17. The earnings dilution in 3Q17 due to the acquisition of Novadaq Technologies, which is expected to close by the end of 3Q17, is expected to be approximately $0.03–$0.05 per share.

According to analysts’ projections for 2017, Stryker’s competitors Becton, Dickinson and Company (BDX), Zimmer Biomet Holdings (ZBH), and Abbott Laboratories (ABT) are estimated to earn revenues of $12.1 billion, $7.8 billion, and $26.5 billion, respectively, in 2017.

Investors seeking exposure to Stryker can invest in the Vanguard S&P 500 ETF (IWF). IWF has exposure of around 0.41% to SYK.

Next, let’s look at Stryker’s recent dividend announcement.


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