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Stryker Corporation (SYK)
Bank of America Merrill Lynch 2019 Health Care Conference
May 14, 2019 1:40 PM ET
Glenn Boehnlein - Vice President and Chief Financial Officer
Katherine Owen - Vice President of Strategy & Investor Relations
Andy Pierce - Group President, MedSurg
Conference Call Participants
Robert Hopkins - Bank of America Merrill Lynch
Q - Robert Hopkins
Previous Statements by SYK
» Stryker Corp. (SYK) CEO Kevin Lobo on Q1 2019 Results - Earnings Call Transcript
» Stryker Corp. (SYK) CEO Kevin Lobo on Q4 2018 Results - Earnings Call Transcript
» Stryker Corp. (SYK) Management Presents at Evercore ISI HealthCONx Conference (Transcript)
Yes, I think, first of all, it's kind of a good and a bad that we are a little undersized [technical difficulty]. Right, if you look at sort of the impact to us on tariffs, it's more outbound what we import, what we export from China. I think before we guided to you about $25 million, as we reassess the new round of tariffs, we think that it's maybe $3 million to $5 million more. So, we think that it will be covered within the existing guidance that we provided.
Okay, that's great. Was there anything that stood out -- I mean I know it's very early. It's some of the stuff from this week that you saw from the MedTech perspective just broadly do you think we should be looking at?
Yes. No, I don't think anything really sticks out. I think that MedTech has not been as big a target. I mean the flipside of this that we are probably still evaluating although I don't think it will be so big, would just be the inbound relative to what's imported into China and the new round of tariffs that China announced yesterday.
Okay. So, I wanted to try to cover a couple of topics. One is the -- it's really the theme is sort of sustainability, wanted to talk about sustainability of growth in MedSurg, wanted to talk about sustainability of growth outside the United States. And then obviously want to talk about strategy in Mako. But before we do that, I am wondering if we could kind of reflect back a little bit on the last two quarters, because you guys gave some strong guidance at the start of the beginning of the year, took the stock up nicely and then had a very solid quarter and tweak the guidance up again. So, I'm just curious looking back, could you just talk about what drove those decisions to give the kind of guidance that you gave, sort of your philosophy around how you think about that and -- because it was a nice part of the surprise it has a big impact on the stock, so I think it's worthy of some discussion here before we get going on the business.
Yes, so maybe I will start because it really is a process we go through every quarter and certainly at year-end as we think about setting the targets for the year, because it's based on our budget, and we also want to make sure that it reflects what we truly think the organization can deliver, and you don’t want it so low that you're always blown by it, and then you lose credibility on that end, nor do you want to guide down. So, it's part based on analytics and part based on little bit of subjectivity around it. And clearly as we got towards the end of the fourth quarter, it was [technical difficulty] was a lot of tailwinds and in the quarter you say that product made the quarter for Stryker, but when you add up all those products, the totality of them are really what helps drive that organic growth towards our goal of being at the high-end of Med Tech. And so, as we look ahead to the 2019 calendar year, whether it was launching a new camera in endo, which is a big driver for them, neuro getting into new markets while having a backdrop of a market that continues to be very healthy, strong momentum with Mako, and I'm feeling really good about the momentum there, new hip cup offering and then you look across the other MedSurg businesses splitting the sales force in instruments, benefiting from a number of acquisitions we had done there, and really across the organization.
And so, the bread and butter of our deal activity tends to be these smaller deals, it's the NOVADAQ, it's the Pivot, it's the Entellus that are small in isolation, but when you layer those into our global sales and marketing infrastructure, and we are able to really put more resources behind it, they became a big driver of growth and so all of that layered along continued strong momentum in Europe seeing better results in emerging markets, we have put a lot of new talent in place over there, and it was all coming together. That said, we are in a really good position at the start of the year.