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Stryker reported 2Q22 orthopedic sales of $2.3 billion, +1.6% compared to 2Q21.
The shift from outright purchases to rental agreements for Mako robotic units played a role in the apparent down quarter, at least by Stryker standards. Despite Mako installs climbing 19% compared to a year ago, the company’s revenue reporting segment that contains robotics declined almost -14%.
Company leadership isn’t worried about the development. Stryker CEO Kevin Lobo said, “If your competitor offers a rental option, the customer says do you have a rental option. We’re not going to let our prior contracting approach stop us from competing. Let the technologies fight head-to-head and let the best technology win.”
The second quarter once again illustrated the effectiveness of Stryker’s robotic pull-through strategy. Excluding robotics revenue, the company’s knee replacement and hip replacement business grew above the market average. Extremity joint replacement grew double-digits on the strength of shoulder as well as total ankle replacement. Likewise, the company’s ASC-focused selling teams drove double-digit growth in sports medicine once again.
However, both the spine and trauma segments declined. A soft scoliosis market hurt spine, while general slowness in trauma impacted that segment. Losses were much more significant outside the U.S.
Once again, Mr. Lobo said there is no cause for alarm. “The underlying core trauma market was a little bit softer. That happens from quarter to quarter. It’s not unusual. I have zero worries about our Trauma and Extremities business. As you’ve seen over the past five years, that business performs very, very well. There is nothing holding it back. I’m pretty bullish on that business for the future.”
Stryker expects modest procedure volume improvement throughout the second half, offset by lingering staffing and supply chain challenges. While the company will continue to evaluate tuck-in acquisitions, the current priority is on digesting the Wright Medical and Vocera buys while fortifying its balance sheet.
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 2Q22 | 2Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,229.3 | $1,176.1 | $53.3 | 4.5% |
| Knees | $594.0 | $569.7 | $24.3 | 4.3% |
| Hips | $430.8 | $420.8 | $10.0 | 2.4% |
| Extremities | $204.5 | $185.6 | $18.9 | 10.2% |
| Spine | $276.1 | $292.9 | ($16.8) | (5.7%) |
| Trauma | $472.1 | $486.9 | ($14.8) | (3%) |
| Sports Medicine | $179.0 | $160.2 | $18.8 | 11.7% |
| Orthobiologics | $70.2 | $70.4 | ($0.2) | (0.3%) |
| Other (CMF) | $72.2 | $77.1 | ($4.9) | (6.4%) |
| Total | $2,298.9 | $2,263.6 | $35.3 | 1.6% |
| 1H22 | 1H21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,356.9 | $2,226.8 | $130.0 | 5.8% |
| Knees | $1,139.9 | $1,072.1 | $67.8 | 6.3% |
| Hips | $819.3 | $793.7 | $25.6 | 3.2% |
| Extremities | $397.6 | $361.0 | $36.6 | 10.1% |
| Spine | $541.5 | $558.1 | ($16.6) | (3%) |
| Trauma | $964.0 | $949.1 | $14.8 | 1.6% |
| Sports Medicine | $345.5 | $311.5 | $34.0 | 10.9% |
| Orthobiologics | $139.0 | $136.5 | $2.5 | 1.8% |
| Other (CMF) | $149.0 | $150.0 | ($1.0) | (0.7%) |
| Total | $4,495.9 | $4,332.1 | $163.8 | 3.8% |
Orthopedic Sales by Geography
| 2Q22 | 2Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,705.1 | $1,653.1 | $52.0 | 3.1% |
| OUS | $593.8 | $610.5 | ($16.7) | (2.7%) |
| EMEA | $310.4 | $294.3 | $16.1 | 5.5% |
| Asia Pacific | $229.9 | $271.6 | ($41.7) | (15.4%) |
| Rest of World | $53.5 | $44.6 | $8.9 | 20% |
| Total | $2,298.9 | $2,263.6 | $35.3 | 1.6% |
| 1H22 | 1H21 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,314.8 | $3,121.2 | $193.6 | 6.2% |
| OUS | $1,181.1 | $1,210.9 | ($29.8) | (2.5%) |
| EMEA | $596.0 | $573.5 | $22.4 | 3.9% |
| Asia Pacific | $471.6 | $530.2 | ($58.6) | (11.1%) |
| Rest of World | $113.6 | $107.2 | $6.4 | 6% |
| Total | $4,495.9 | $4,332.1 | $163.8 | 3.8% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $4,493.0 | |
| Cost of Sales | $1,667.0 | 37.1% |
| Selling and Admin | $1,539.0 | 34.3% |
| R & D | $351.0 | 7.8% |
| Other | $280.0 | 6.2% |
| Net Earnings | $656.0 | 14.6% |
Stryker reported 2Q22 orthopedic sales of $2.3 billion, +1.6% compared to 2Q21.
The shift from outright purchases to rental agreements for Mako robotic units played a role in the apparent down quarter, at least by Stryker standards. Despite Mako installs climbing 19% compared to a year ago, the company’s revenue reporting segment that...
Stryker reported 2Q22 orthopedic sales of $2.3 billion, +1.6% compared to 2Q21.
The shift from outright purchases to rental agreements for Mako robotic units played a role in the apparent down quarter, at least by Stryker standards. Despite Mako installs climbing 19% compared to a year ago, the company’s revenue reporting segment that contains robotics declined almost -14%.
Company leadership isn’t worried about the development. Stryker CEO Kevin Lobo said, “If your competitor offers a rental option, the customer says do you have a rental option. We’re not going to let our prior contracting approach stop us from competing. Let the technologies fight head-to-head and let the best technology win.”
The second quarter once again illustrated the effectiveness of Stryker’s robotic pull-through strategy. Excluding robotics revenue, the company’s knee replacement and hip replacement business grew above the market average. Extremity joint replacement grew double-digits on the strength of shoulder as well as total ankle replacement. Likewise, the company’s ASC-focused selling teams drove double-digit growth in sports medicine once again.
However, both the spine and trauma segments declined. A soft scoliosis market hurt spine, while general slowness in trauma impacted that segment. Losses were much more significant outside the U.S.
Once again, Mr. Lobo said there is no cause for alarm. “The underlying core trauma market was a little bit softer. That happens from quarter to quarter. It’s not unusual. I have zero worries about our Trauma and Extremities business. As you’ve seen over the past five years, that business performs very, very well. There is nothing holding it back. I’m pretty bullish on that business for the future.”
Stryker expects modest procedure volume improvement throughout the second half, offset by lingering staffing and supply chain challenges. While the company will continue to evaluate tuck-in acquisitions, the current priority is on digesting the Wright Medical and Vocera buys while fortifying its balance sheet.
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 2Q22 | 2Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,229.3 | $1,176.1 | $53.3 | 4.5% |
| Knees | $594.0 | $569.7 | $24.3 | 4.3% |
| Hips | $430.8 | $420.8 | $10.0 | 2.4% |
| Extremities | $204.5 | $185.6 | $18.9 | 10.2% |
| Spine | $276.1 | $292.9 | ($16.8) | (5.7%) |
| Trauma | $472.1 | $486.9 | ($14.8) | (3%) |
| Sports Medicine | $179.0 | $160.2 | $18.8 | 11.7% |
| Orthobiologics | $70.2 | $70.4 | ($0.2) | (0.3%) |
| Other (CMF) | $72.2 | $77.1 | ($4.9) | (6.4%) |
| Total | $2,298.9 | $2,263.6 | $35.3 | 1.6% |
| 1H22 | 1H21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,356.9 | $2,226.8 | $130.0 | 5.8% |
| Knees | $1,139.9 | $1,072.1 | $67.8 | 6.3% |
| Hips | $819.3 | $793.7 | $25.6 | 3.2% |
| Extremities | $397.6 | $361.0 | $36.6 | 10.1% |
| Spine | $541.5 | $558.1 | ($16.6) | (3%) |
| Trauma | $964.0 | $949.1 | $14.8 | 1.6% |
| Sports Medicine | $345.5 | $311.5 | $34.0 | 10.9% |
| Orthobiologics | $139.0 | $136.5 | $2.5 | 1.8% |
| Other (CMF) | $149.0 | $150.0 | ($1.0) | (0.7%) |
| Total | $4,495.9 | $4,332.1 | $163.8 | 3.8% |
Orthopedic Sales by Geography
| 2Q22 | 2Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,705.1 | $1,653.1 | $52.0 | 3.1% |
| OUS | $593.8 | $610.5 | ($16.7) | (2.7%) |
| EMEA | $310.4 | $294.3 | $16.1 | 5.5% |
| Asia Pacific | $229.9 | $271.6 | ($41.7) | (15.4%) |
| Rest of World | $53.5 | $44.6 | $8.9 | 20% |
| Total | $2,298.9 | $2,263.6 | $35.3 | 1.6% |
| 1H22 | 1H21 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,314.8 | $3,121.2 | $193.6 | 6.2% |
| OUS | $1,181.1 | $1,210.9 | ($29.8) | (2.5%) |
| EMEA | $596.0 | $573.5 | $22.4 | 3.9% |
| Asia Pacific | $471.6 | $530.2 | ($58.6) | (11.1%) |
| Rest of World | $113.6 | $107.2 | $6.4 | 6% |
| Total | $4,495.9 | $4,332.1 | $163.8 | 3.8% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $4,493.0 | |
| Cost of Sales | $1,667.0 | 37.1% |
| Selling and Admin | $1,539.0 | 34.3% |
| R & D | $351.0 | 7.8% |
| Other | $280.0 | 6.2% |
| Net Earnings | $656.0 | 14.6% |
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
