Stryker reported third quarter 2026 results on October 30. Organic sales grew 7.7 percent to $6.5 billion, short of the $6.62 billion Wall Street expected, and adjusted earnings per share rose 10.3 percent to $3.52, also below the $3.55 consensus. The company cut its full year adjusted EPS guidance to a range of $14.80 to $14.90, below the prior $14.95 consensus, and lowered its organic growth outlook to 6.5 to 7 percent. MedTech Insight reported shares fell as much as 12 percent in after hours trading on the news.
Outgoing CEO Kevin Lobo told investors the quarter did fall short of expectations and said it is now clear there is a market slowdown in orthopaedics, where knee sales rose 1.1 percent and hip sales fell 1.0 percent for the quarter. He went further, saying Stryker has not been winning at its historical rate, and named three reasons together: a cyber incident, a July SAP rollout, and slow uptake of new products. Neither Lobo nor CFO Preston Wells put a dollar figure on how much of the shortfall traces to the cyberattack specifically, as distinct from the SAP transition or the broader market slowdown.
The cyber incident is the one Stryker disclosed on March 13, when an intrusion disrupted manufacturing and order processing across its global network. The company has quantified a piece of the fallout every quarter since. In May it held its full year guidance despite what it called a meaningful first quarter impact. In July it reported $6.59 billion in second quarter sales with recovery underway. In September, CFO Wells told the Wells Fargo Healthcare Conference the attack would cost roughly $45 million, or 70 to 80 basis points, of third quarter sales, concentrated in the peripheral vascular business built from the 2025 Inari Medical acquisition. October 30 is the first quarter in that sequence where Stryker cut guidance rather than held it, seven months after the intrusion.
A cyberattack's cost rarely ends when the systems come back online, and Stryker's own account of the quarter shows why that cost is hard to isolate. Lobo bundled the cyber incident with an ERP rollout and a product cycle miss as reasons the company lost share, which is the pattern manufacturers should expect: once production and order systems are restored, the attack's remaining cost shows up folded into ordinary commercial execution, where it is nearly impossible to separate from problems that have nothing to do with the intrusion. A damage estimate built only from the weeks of outage will understate the total. The real tail runs through the next two or three earnings calls, mixed in with everything else that happens to be going wrong at the same time.
Peers reporting the same quarter show the orthopaedics slowdown Lobo described is not universal. Johnson & Johnson's knee and hip sales rose 2.5 and 3.2 percent respectively over the same period. Zimmer Biomet raised its own 2026 guidance in August, citing healthy underlying markets, after hip sales grew 5.1 percent organically in the second quarter. Smith and Nephew is the closer comparison: it cut its own 2026 outlook in August after US knee and hip sales fell. Lobo, who announced on October 6 that he will hand the CEO role to president and chief operating officer Spencer Stiles, leaves his successor both the production recovery and the guidance reset to manage into 2027.