$SYK · STRYKER CORP
Stryker filed its Q3 FY2026 10-Q, reporting net sales of $6.52B (+7.6% YoY) and GAAP diluted EPS of $1.96, down 11.7% from $2.22 a year ago. A $293M goodwill and other impairments charge — up from $73M in Q3 2025 — drove the GAAP earnings decline. Adjusted EPS rose 10.3% to $3.52, with adjusted operating margin expanding 30 bps to 25.0% for the nine-month period.
- Q3 GAAP net earnings fell 12.3% YoY to $753M, with diluted EPS of $1.96 vs $2.22 a year ago.
- A $293M goodwill and other impairments charge hit Q3 operating income, up from $73M in Q3 2025.
- Adjusted EPS of $3.52 beat the prior-year $3.19 by 10.3%, driven by 7.6% revenue growth to $6.52B.
- SG&A expenses surged 13.1% YoY to $2.31B, expanding to 35.5% of net sales from 33.8%.
- The effective tax rate jumped to 24.5% in Q3 2026 from 16.5% in Q3 2025, compressing net earnings.
SYK fell 5.21% to $295.50 in the regular session. The GAAP miss — net earnings down 12.3% on a $293M impairment charge and SG&A deleverage — appears to be outweighing the adjusted EPS beat, consistent with a market punishing margin compression and below-the-line noise at a $113B med-tech giant.
A $113B med-tech bellwether posting a 12.3% GAAP earnings drop on a 4x spike in impairment charges raises questions about capital-allocation discipline even as adjusted results beat.
Stryker's 7.6% organic revenue growth remains solid for large-cap med-tech, but the SG&A expansion to 35.5% of sales and the impairment charge stand out negatively against peers like JNJ and SYK's own historical margin profile.
Goodwill and other impairments surged to $293M in Q3 from $73M a year ago, concentrated in a single quarter. Product liability claims are self-insured and could materially differ from current accruals. The AVS acquisition carries up to $400M in future milestone payments.