We expect medical technology producer
) to beat expectations when it reports 2014-first-quarter
operating results on April 23.
Why a Likely Positive Surprise?
Our proven model shows that Stryker is likely to beat earnings
because it has the right combination of two key ingredients.
: Expected Surprise Prediction or
represents the difference between the Most Accurate estimate and
the Zacks Consensus Estimate. Stryker has a Zacks ESP of +0.93%.
This is very meaningful and a leading indicator of a likely
positive earnings surprise for shares.
: Stryker carries a Zacks Rank #3 (Hold). Note that stocks with
Zacks Ranks of #1, 2 and 3 have a significantly higher chance of
beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of Stryker's Zacks Rank #3 (Hold) and +0.93% ESP
makes us confident of a possible positive earnings beat on April
What is Driving the Better-than-Expected
Stryker had reported impressive results for the
2013-fourth-quarter. Stryker's net revenues increased 5.6% to
$2.5 billion, which in turn caused the company's earnings to rise
7.9% year over year to $1.23 per share in the reported quarter,
beating the Zacks Consensus Estimate by a penny.
The acquisition of MAKO Surgical by Stryker is expected to
improve physician's ability to simplify joint reconstruction
procedures. Management believes that this acquisition has
provided Stryker a big opportunity for earnings growth and
reinforced its competitive position in the global reconstructive
In the fourth quarter, Stryker's research and development
expenses increased 10 basis points to $139 million. This reflects
Stryker's commitment to invest in areas which will enable the
company to deliver above-market sales growth in each of its key
Based on its solid performance in the past quarter, Stryker's
Board of directors increased the company's quarterly dividend by
15% over the prior year to 30.5 cents per share. The dividend is
payable on April 30, 2014
Other Stocks to Consider
Stryker is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
Myriad Genetics Inc.
), earnings ESP of +10.87% and a Zacks Rank #1 (Strong Buy).
), earnings ESP of +50.00% and a Zacks Rank #2 (Buy).
Edwards Lifesciences Corp.
), earnings ESP of +1.47% and a Zacks Rank #2 (Buy).
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