SYK · 10-Q · 2026Q3

STRYKER CORP

Filed 2026-10-30 · Healthcare · View original filing on EDGAR

Ranked Events

• Income Tax Rate ChangesImportance 60 · Surprise 74
  The effective tax rate was 24.5% in the third quarter of 2026, compared with 16.5% in the third quarter of 2025.,For the first nine months, the effective tax rate increased to 18.7% from 14.7%.,The third-quarter increase was attributed to the nondeductible $293 million goodwill impairment related to Peripheral Vascular.,The nine-month rate increase reflected the nondeductible goodwill impairment and the prior-year tax benefit associated with the sale of the Spinal Implants business.
• Operating Income and MarginsImportance 54 · Surprise 40
  Third-quarter operating income was $1,034 million, down from $1,135 million, and operating margin fell to 15.9% from 18.7%.,Nine-month operating income increased to $3,629 million from $3,085 million, with operating margin rising to 19.0% from 17.2%.,Third-quarter MedSurg and Neurotechnology operating margin rose to 28.7% from 26.1%, primarily due to lower SG&A, lower manufacturing and supply-chain costs, and higher unit volumes.,Third-quarter Orthopaedics operating margin declined to 31.2% from 32.4%, as higher SG&A and manufacturing and supply-chain costs partly offset higher unit volumes.
• Operating Expense TrendsImportance 54 · Surprise 40
  Third-quarter selling, general and administrative expense increased $268 million, or 13.1%, to $2,313 million, and rose to 35.5% of sales from 33.8%, primarily because of higher structural optimization and other special charges.,Nine-month SG&A increased $399 million, or 6.2%, to $6,823 million, while its sales ratio was nearly flat at 35.7% versus 35.8%.,Nine-month research, development and engineering expense increased $58 million, or 4.7%, to $1,280 million; it was 6.7% of sales compared with 6.8% a year earlier.,Higher nine-month structural optimization and other special charges were offset by lower acquisition and integration-related costs.
• Gross Margin DriversImportance 54 · Surprise 40
  Third-quarter gross profit rose to $4,248 million from $3,852 million, and gross margin increased to 65.2% from 63.6%.,Quarterly margin improvement reflected 60 basis points from volume and mix and 100 basis points from lower amortization of inventory stepped up to fair value; manufacturing and supply-chain costs reduced margin by 20 basis points.,Nine-month gross profit was $12,556 million versus $11,437 million, and gross margin increased to 65.6% from 63.7%.,Nine-month margin benefited from a 90-basis-point reversal of 2025 tariffs and 90 basis points from lower inventory step-up amortization, partly offset by an 80-basis-point increase in manufacturing and supply-chain costs, primarily tied to idle production time from the first-quarter 2026 cybersecurity incident.
• Supply Chain ConstraintsImportance 52 · Surprise 42
  Stryker reported that Peripheral Vascular operating results were affected by near-term operational and supply constraints and a longer expected period to achieve anticipated growth and market recovery. The company’s…
• Other Income (Expense), NetImportance 51 · Surprise 64
  Other income increased to $106 million in the third quarter of 2026 from $51 million a year earlier, a 107.8% increase.,Nine-month other income rose to $214 million from $177 million, a 20.9% increase.,The increases in both periods were primarily due to income from intellectual-property licensing in 2026.
• Market Demand TrendsImportance 49 · Surprise 32
  Consolidated net sales increased 7.7% in the third quarter and 6.6% for the first nine months of 2026. Growth was primarily volume-driven, with higher product shipments across all MedSurg and Neurotechnology businesses…
• Revenue Performance and MixImportance 49 · Surprise 32
  Third-quarter 2026 net sales increased 7.7% to $6,520 million, with constant-currency growth of 7.6% driven by unit volume and 0.1% by higher prices.,Nine-month 2026 net sales increased 6.6% to $19,129 million; constant-currency growth was 5.9%, and organic constant-currency growth was 6.2% after excluding a 0.5% acquisition and divestiture impact.,MedSurg and Neurotechnology sales grew 9.2% in the quarter and 8.0% for nine months, while Orthopaedics sales grew 5.7% and 4.9%, respectively.,For the nine months, U.S. sales increased 6.0% to $14,385 million and international sales increased 8.3% to $4,744 million.
• Balance Sheet and LiquidityImportance 46 · Surprise 30
  Cash, cash equivalents, short-term investments and marketable securities totaled $3,271 million at September 30, 2026, down from $4,100 million at December 31, 2025.,Current assets exceeded current liabilities by $7,683 million at September 30, 2026, compared with $6,961 million at December 31, 2025.,Cash, cash equivalents, short-term investments and marketable securities held outside the United States represented approximately 44% of the total at September 30, 2026, versus 20% at December 31, 2025.,Nine-month operating cash flow increased to $3,303 million from $2,901 million, primarily because higher net earnings were partly offset by working-capital changes.
• Geographic Market CommentaryImportance 43 · Surprise 32
  United States sales increased 8.3% in the third quarter and 6.0% for the first nine months of 2026. International sales increased 5.7% in the quarter and 8.3% year to date as reported; constant-currency growth was 6.0%…
• Acquisition / Partnership / DivestitureImportance 34 · Surprise 42
  Stryker completed the acquisition of AVS during the first nine months of 2026, and the period’s investing cash flows included the net cash consideration paid for the acquisition.,Nine-month investing activities used $1,011 million in cash, compared with $4,561 million in the prior-year period.,The filing also identifies the prior-year acquisition of Inari and the sale of the Spinal Implants business; the Spinal Implants sale generated a tax benefit that affected the nine-month effective tax-rate comparison.
• Guidance / OutlookImportance 33 · Surprise 24
  Management expects segment mix to have an unfavorable impact on gross margin for the foreseeable future. This outlook reflects anticipated faster sales growth in the lower-gross-margin MedSurg and Neurotechnology…
• Capital Return ProgramImportance 26 · Surprise 24
  Stryker repurchased $1,000 million of common stock during the first nine months of 2026.,Financing activities used $2,998 million of cash in the 2026 nine-month period, with the use of cash primarily driven by $1,000 million of repayments for maturing unsecured notes, common-stock repurchases, and dividend payments.,Financing activities provided $1,206 million in the prior-year nine-month period, primarily from issuance of senior unsecured notes, partly offset by dividend payments.

Revenue by Product (in millions)