Stryker raises lower end of annual profit forecast

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By Bageshri Banerjee

(Reuters) -Stryker on Thursday raised the lower end of its full-year profit forecast after beating estimates for third-quarter earnings, banking on strong demand for its medical and surgical devices.

The company, which makes medical implants to repair broken bones and replace joints like hips and knees, now expects full-year profit in the range of $13.50 to $13.60 per share, compared with its previous forecast of $13.40 to $13.60 per share.

Investor expectations around medical device makers have grown in recent quarters as they expect them to benefit from elevated demand for surgical procedures, as more older patients opt for medical procedures deferred during the pandemic.

However, analysts at Truist Securities warned that if the overall knee market is shrinking, Stryker will need to gain market share from competitors to grow its orthopedic segment. That puts pressure on Stryker to outperform peers in product innovation, pricing or sales execution.

“We continue to see a positive trend in our pricing initiatives, both in the U.S. and international markets, and both with our medsurg and neurotech and orthopedic and spine segments, each contributing positive pricing for the quarter.” CFO Glenn Boehnlein said on a post earnings call.

Sales at Stryker’s medical surgery and neurotechnology unit rose 14.4% to $3.80 billion, while its orthopedics segment saw an increase in sales of 3.9% to $2.25 billion.

Total revenue for the quarter ended September 30 was $6.06 billion, above analysts’ expectations of $6.05 billion.

On an adjusted basis, the company earned $3.19 per share in the third quarter, beating estimates of $3.13 per share.

The medical equipment maker had previously said it planned to offset any tariff hit by optimizing its manufacturing footprint.

(Reporting by Bageshri Banerjee in Bengaluru; Editing by Anil D’Silva)