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What to Expect from Stryker’s Q2 2018 Earnings

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Company overview

Stryker Corporation (SYK), a Fortune 500 medical technology company, is expected to report its second-quarter earnings on July 24. Its products and services serve treatment areas such as orthopedics, surgical, neurotechnology, and spine. 

Stryker’s products include implants for use in hip and knee joint replacements, surgical equipment, and surgical navigation systems. These implants are also used in endoscopic and communications systems, emergency medical equipment, and intensive care disposable products. Its neurotechnology and spine products include neurosurgical, neurovascular, and spinal implant devices.

In this series, we’ll look the company’s expected top-line, bottom-line, and operational performance for the second quarter. We’ll also review analysts’ recommendations for Stryker and the performance of its stock so far this year.

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Top-line forecast

Analysts expect Stryker’s (SYK) revenues to grow 10.08% from $3.01 billion in the second quarter of 2017 to $3.3 billion in the second quarter. In the second quarter of 2017, its revenues had grown 6.06%. In fiscal 2017, Stryker had generated revenues of $12.44 billion. For fiscal 2018 and fiscal 2019, Stryker is expected to generate revenues of $13.58 billion and $14.44 billion, respectively.

Stryker expects its cost of goods sold to increase 9.74% from $1.01 billion in the second quarter of 2017 to $1.11 billion in the second quarter. The company’s gross income is expected to increase 10.3% from $1.99 billion in the second quarter of 2017 to $2.2 billion in the second quarter.

These trends indicate an expansion in Stryker’s gross margins from 8.41% in the second quarter of 2017 to 10.3% in the second quarter. In the last four quarters, Stryker’s gross margins have ranged from 5.98% to 10.08%.

In the next part of this series, we’ll look at Stryker’s expected second-quarter operational performance and analysts’ views on the stock.

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