Stryker Corporation (SYK) saw its stock tumble 6.47% on May 1, closing at $294.73, after the medical-device maker reported first-quarter earnings that fell short of Wall Street expectations. The company attributed the shortfall to a cyberattack in late March that disrupted manufacturing, order processing, and shipments, creating a ripple effect across its operations.
For the quarter ended March 31, Stryker posted net sales of $6.0 billion, a 2.6% year-over-year increase but well below the $6.35 billion consensus estimate compiled by Reuters. Adjusted earnings per share came in at $2.60, down 8.5% from a year ago and missing the $2.98 forecast. The cyber incident, disclosed in an SEC filing, had a material impact on the quarter's results, affecting revenue recognition, patient scheduling, and supply chain logistics.
Despite the setback, management maintained its 2026 outlook, projecting organic net sales growth of 8.0% to 9.5%. The company said most of the delayed sales are expected to shift into the second half of the year, with some recovery beginning in the second quarter. Chief Executive Kevin Lobo told analysts on the earnings call that the company recovered quickly from the incident and remains confident in its full-year targets.
The impact was uneven across Stryker's business segments. MedSurg and Neurotechnology sales rose 5.0% to $3.2 billion, with organic growth of just 0.9%. Orthopaedics, which includes hip, knee, shoulder, and trauma implants, generated $2.8 billion in sales, essentially flat, but organic growth reached 4.1%. Chief Financial Officer Preston Wells noted that hospitals had sufficient inventory to support orthopedic procedures, though revenue-recognition delays persisted. In MedSurg, make-to-order capital products face a longer recovery timeline.
Margins also took a hit. Adjusted gross margin declined 190 basis points year over year, driven by manufacturing losses from the shutdown and tariff impacts. Adjusted operating margin fell 180 basis points to 21.1%. The company's SEC filing warned of ongoing risks, including potential system integrity issues, unauthorized data leaks, legal actions, and regulatory scrutiny that could affect customer and supplier relationships.
Analysts viewed the sales miss as significant but temporary. RBC Capital Markets' Shagun Singh flagged a roughly $317 million shortfall against consensus organic-sales forecasts, while Stifel's Rick Wise highlighted robust end-market momentum and projected a strong growth year ahead, expecting a recovery through the rest of 2026.
The cyberattack's impact was isolated to Stryker, with competitors largely unaffected. Medtronic reported this week that a separate cyber incident did not affect its products or distribution. Stryker's main rivals in orthopedics include Zimmer Biomet and Johnson & Johnson.
Investors will watch for signs of recovery in the coming quarters as the company works to recapture delayed procedures and shipments. The stock edged up to $295.00 in after-hours trading, suggesting cautious optimism that the disruption is a temporary blip rather than a long-term drag.
