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Product / Company Performance

Stryker reports 1Q19 orthopedic revenue of $1,881.7MM, +7.8% vs. 1Q18 -

By Mike Evers, ORTHOWORLD

Stryker posted 1Q19 orthopedic revenue of USD $1,881.7MM, +7.8% vs. 1Q18.

Segment Performance Notes

  • Cementless knees account for about 30% of all Stryker knee implants, and have begun to impact the sales of bone cement
  • Hip sales driven by recently launched 3D-printed acetabular cup
  • Leadership really likes the shoulder joint replacement market and is pleased with the progress of that portfolio. This could potentially be an acquisition target for Stryker, as CEO Kevin Lobo said, “Every business of Stryker is on the hunt for new acquisitions.”
  • In spine, the K2M integration is proceeding as expected and sales grew 2% on a combined company basis
  • Trauma foot and ankle products have been a segment growth driver for Stryker
  • Launch of the T2 Tibia Nailing System was delayed, with full commercial launch expected in the second half of the year
  • Company claims market leadership in sports medicine hips, with room to grow in knees and shoulders

 

Mako Update

  • 35 robots installed in the quarter (27 in U.S.), +25% vs. 1Q18
  • For the quarter, 55% of installed units went into competitive accounts where Stryker has little to no market share
  • Approaching installed base of 700 robots, with 550 in the U.S.
  • Around 10% of hospitals that have a Mako purchase multiple units
  • More than 15,000 total knee procedures, +80% vs. 1Q18
  • Utilization rates up 30% year over year

 

ORTHOWORLD estimates segment sales and growth on an as-reported basis, as follows ($MM):

  1Q19 1Q18 $ Chg % Chg
Joint Replacement $945.1 $901.8 $43.3 4.8%
Knees $515.4 $489.4 $26.1 5.3%
Hips $395.9 $380.7 $15.2 4.0%
Extremities $33.7 $31.6 $2.1 6.6%
Spine $244.6 $176.7 $67.9 38.4%
Trauma $367.9 $362.6 $5.2 1.4%
Sports Medicine $183.3 $173.6 $9.7 5.6%
Orthobiologics $62.2 $56.5 $5.7 10.1%
Other (CMF) $78.8 $75.1 $3.7 4.9%
Total  $1,881.7 $1,746.3 $135.5 7.8%

Please note: We’ve recalculated Stryker’s 1Q18 sports medicine revenue. We’re constantly evaluating and refining our models. Our research indicated that we may be underestimating Stryker’s sports medicine revenue, so we’ve updated our model accordingly.

ORTHOWORLD estimates geographic sales and growth as follows ($MM):

Geographic Region 1Q19 1Q18 $ Chg % Chg
US $1,380.2 $1,246.8 $133.5 10.7%
Ex-US $501.5 $499.47 $2.0 0.4%
   EMEA $234.4 $232.3 $2.2 0.9%
   Asia Pacific $220.6 $222.3 -$1.6 -0.7%
   Other $46.4 $45.0 $1.4 3.2%
Total  $1,881.7 $1,746.3 $135.5 7.8%

Net earnings, inclusive of all Stryker revenue, is as follows:

1Q19 Amount ($MM) % of Sales
Sales $3,516.0  
   Cost of Sales -$1,233.0 35.1%
   Selling and Admin -$1,403.0 39.9%
   R & D -$225.0 6.4%
   Other -$243.0 6.9%
Net Earnings  $412.0 11.7%

 

Sources: Stryker; ORTHOWORLD estimates.

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

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