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What Are Stryker’s Key Growth Drivers in 2019?

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Growth drivers

On its fourth-quarter earnings conference call, Stryker (SYK) said that it expects its MedSurg segment to be a major growth driver for it in 2019 driven by multiple new product launches.

The company is also optimistic about its Neurotechnology and Spine segment in 2019, and it expects to benefit from organic growth as well as its K2M acquisition. The company’s Orthopaedics segment is also reporting robust demand for its 3D products and Mako Total Knee platform.

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Growth trends

In 2018, MedSurg reported net sales of $6.04 billion, a YoY (year-over-year) rise of 10.1% on a reported basis and 10.0% on a constant currency basis. The business reported 7.9% YoY revenue growth on an organic basis driven by a 9.3% rise in sales volumes partly offset by a 1.4% fall in prices.

According to the company’s fourth-quarter earnings conference call, its three major MedSurg businesses—endoscopy, instruments, and medical—have grown organically between 9% and 12% in 2018. According to the earnings call, the company’s instruments business has reported solid growth in its surgical power and waste-management surgical businesses in the US market. According to Stryker’s fourth-quarter earnings conference call, the endoscopy business’s US performance was driven by demand from the sports medicine, communications, and ProCare businesses. Finally, according to the call, the medical business reported solid demand in the Sage, emergency medical services, and bed businesses.

In 2018, the Neurotechnology and Spine segment reported net sales of $2.56 billion, a YoY rise of 18.6% on a reported basis and 18.0% on a constant currency basis. According to Stryker’s fourth-quarter earnings press release, the segment reported 10.6% YoY revenue growth on an organic basis driven by a 12.2% rise in sales volumes partly offset by a 1.6% fall in prices.

In 2018, the Orthopaedics segment reported net sales of $4.99 billion, a YoY rise of 6.4% on a reported basis and 5.9% on a constant currency basis. According to Stryker’s fourth-quarter earnings press release, the segment reported 5.9% YoY revenue growth on an organic basis driven by an 8.1% rise in sales volumes partly offset by a 2.2% fall in prices.

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