Core Viewpoint - Stryker Corporation is expected to report strong second-quarter 2025 results, with earnings and revenue growth driven by robust product demand and new launches [1][9]. Q2 Estimates - The Zacks Consensus Estimate for earnings is $3.06 per share, reflecting an 8.9% year-over-year increase [2]. - Revenue is projected at $5.96 billion, indicating a 9.9% growth compared to the previous year [2]. Factors to Note - Stryker achieved 10.1% organic revenue growth in Q1 2025, supported by procedural momentum and successful new product launches [3]. - Full-year organic growth is anticipated to be between 8.5% and 9.5%, with Q2 performance expected to remain strong due to consistent capital demand and new product adoption [3]. Segment Performance - The Mako robotic-assisted surgery segment is expected to continue its momentum, particularly in hips and knees, with record installations noted in Q1 [4]. - Orthopaedics, especially hips and knees, are projected to maintain high-single-digit growth, while trauma and extremities are benefiting from strong demand for the Pangea plating system [4]. - The MedSurg and Neurotechnology segments are anticipated to sustain double-digit growth, driven by strong capital orders and demand for specific devices [5]. New Product Impact - Recent product launches, including Mako 4 and LIFEPAK 35, are likely to have significantly contributed to revenue momentum [6]. - Other new products, such as Artix, AlphaVent Knotless, and Oculan, are building sales pipelines with potential for growth in the latter half of 2025 [6]. Cost and Margin Insights - In Q1, Stryker's gross margin expanded by 190 basis points to 65.5%, and operating margin increased by 100 basis points to 22.9% [7]. - The company anticipates cost pressures in H2 2025 due to new tariffs on imported components, estimating a $200 million annual impact [7]. Earnings Outlook - Adjusted EPS is expected to remain strong in Q2, although growth may moderate slightly due to higher interest expenses and early tariff impacts [8]. - Full-year 2025 EPS is projected to be in the range of $13.20 to $13.45 [8]. Revenue Breakdown - Estimated sales for the MedSurg and Neurotechnology segments are $3.75 billion, while Orthopaedics & Spine segments are pegged at $2.57 billion [10]. - U.S. sales are estimated at $4.74 billion, with international sales at $1.59 billion [10].

Core Insights - Stryker Corporation reported first-quarter 2025 adjusted EPS of $2.84, exceeding the Zacks Consensus Estimate of $2.73 by 4% and showing a year-over-year improvement of 13.6% [1] - Total revenues reached $5.87 billion, surpassing the Zacks Consensus Estimate by 2.9% and reflecting an 11.9% year-over-year increase [2] Revenue Details - U.S. revenues amounted to $4.44 billion, up 13.4% year over year, while international sales increased 7.3% to $1.43 billion, driven by strong performances in Australia, New Zealand, Japan, and Europe [3] - The growth in revenues was attributed to effective pricing initiatives [2] Segmental Analysis - Stryker signed an agreement to sell its U.S. spinal implants business to Viscogliosi Brothers, LLC, with the divestment expected to be completed by the first half of 2025 [4] - The MedSurg and Neurotechnology segment reported sales of $3.51 billion, up 9.4% year over year, with organic sales growth of 10.7% [5][6] Margins - Adjusted gross profit totaled $3.85 billion, a 15.2% increase from the previous year, with adjusted gross margin expanding by 190 basis points to 65.5% [12] - Adjusted operating income was $1.34 billion, up 17.3% year over year, with an adjusted operating margin of 22.9% [12] Financial Update - Stryker ended the first quarter with cash and cash equivalents of $2.32 billion, down from $3.65 billion at the end of the previous quarter [13] - Cumulative net cash provided by operating activities was $250 million, compared to $204 million a year ago [13] 2025 Guidance - The company updated its 2025 revenue growth guidance to 8.5-9.5% on an organic basis, with total revenues expected to reach $24.54 billion [14] - EPS guidance was lowered to $13.20-$13.45, reflecting the dilutive impact of the Inari Medical acquisition [14] Operational Highlights - Stryker's Mako robotic systems saw record installations in the first quarter, with the launch of the next-generation Mako 4 system expected to enhance adoption [17] - The company completed the Inari Medical acquisition in February, which is anticipated to contribute significantly to future performance [18] Challenges and Mitigation - Despite supply disruptions and the impact of tariffs, Stryker plans to offset a projected $200 million tariff impact in 2025 through sales growth and cost control measures [19]