Stryker Earnings: Cost Decline Helps Margin as Profit Grows

S&P 500 (NYSE:SPY) component Stryker Corporation (NYSE:SYK) reported its results for the third quarter. Stryker is a medical technology firm that produces a range of products in medical implants, surgical technologies and emergency medical equipment.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Stryker Corporation Earnings Cheat Sheet

Results: Net income for the medical products rose to $353 million (92 cents per share) vs. $327 million (84 cents per share) in the same quarter a year earlier. This marks a rise of 8% from the year-earlier quarter.

Revenue: Rose 1% to $2.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Stryker Corporation reported adjusted net income of 97 cents per share. By that measure, the company fell short of mean estimate of 98 cents per share. It fell short of the average revenue estimate of $2.13 billion.

Quoting Management: “Our third quarter results reflect solid performance for most of our U.S. franchises, however, this was partly offset by weaker results from key countries outside the U.S. and our capital businesses,” commented Kevin A. Lobo, President and Chief Executive Officer. “We expect market conditions to remain challenging in Europe and for capital equipment, and as a result we are lowering our earnings outlook for 2012 and 2013. This will ensure that Stryker makes the necessary investments to strengthen its position as a market leader while continuing to deliver leveraged earnings gains.”

Key Stats:

The comapny has now seen its net income increase for four quarters in a row. In the second quarter, net income rose 5.1% while the figure climbed 13.9% in the first quarter and 35.9% in the fourth quarter of the last fiscal year from the year earlier.

Revenue has risen for the last four quarters. Revenue increased 3% to $2.11 billion in the second quarter. The figure rose 7.2% in the first quarter from the year earlier and climbed 11% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 98 cents.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from $1.13 per share to $1.14. The average estimate for the fiscal year has fallen to $4.10 per share from $4.11 seven days ago.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Is AT&T’s Stock a Buy Now?

Apple: More Goodies Are Coming

Are P&G Shares a Buy Today?