Stryker Corporation (NYSE:SYK) Q4 2022 Earnings Call Transcript

And if you look at the last decade, our sports business was the fastest launcher of products across all of Stryker and I think he will give that team a big shot in the arm. He moved over kind of midway through last year and excited to have him as part of the team. As you know, we have made other changes within our management team and I am pretty bullish on their prospects for the future. So we won’t sit on our hands and just wait. And already, some of those products, even the Life Spine distribution deal, those kind of products are really helping that, I was at the Spine Sales Kickoff meeting for the year. The momentum is really strong. The teams are feeling good about the future and knowing that Makos coming, of course, helps a lot. But, yeah, it’s going to be — it’s a tough market, as you know, and it has been a tough market for a long time.

But I feel like the combination of this distribution filled we will call gap-filling products, as well as some new products that we have planned, should put us in a pretty good position even prior to the launch.

Matt Miksic: That’s excellent. Thanks so much.

Kevin Lobo: No problem.

Glenn Boehnlein: Thanks, Matt.

Operator: Thank you. The next question comes from Pito Chickering with Deutsche Bank. Please proceed.

Pito Chickering: Hey. Thanks for taking my question. Can you guys hear me?

Kevin Lobo: Yes. We can.

Glenn Boehnlein: We can.

Kevin Lobo: Thank you, Pito.

Pito Chickering: All right. Great. So pre-COVID, the first quarter is about 23% of the annualized EPS. So with the commentary on no EPS growth for first quarter 2023, it looks like you guided about 20% of annual EPS. I understand the hard inflationary comps in 1Q, but why should 1Q be underweight the annual EPS number versus recovered years or should we take this as just back half margin expansion for 2023?

Glenn Boehnlein: Yeah. I think you are astute in your numbers. Definitely, it will be back half margin expansion for 2023. So you are right, we will see relative flat EPS in the first quarter, and then obviously, meaningful expansion starting in Q2, but really accelerating in Q3 and Q4 to drive to the EPS that we guided.

Pito Chickering: Okay. And then just a quick one here on capital outlook, your commentary is very bullish. Can you just quantify us what the new orders in fourth quarter of 2022 were and how it compared to the fourth quarter 2021? Thanks so much.

Jason Beach: Hey, Pito. It’s Jason. We won’t quantify in terms of what we have from an order book perspective. But I would just point back to, I think, what Glenn said earlier around and maybe it was Kevin. But the order book, as we exited 2022 is even larger than when we exited 2021. So we continue to be quite bullish on the capital side as we enter the New Year.