Stryker Q3 earnings fall 12.3% as sales rise 7.7%
The board approved a $3.0 billion increase to Stryker's existing share repurchase program in October 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Stryker Corporation (SYK) reported third-quarter 2026 net sales of $6.5 billion, up 7.7% on both a reported and organic basis. MedSurg and Neurotechnology sales increased 9.2%, while Orthopaedics sales increased 5.7%. Reported net earnings fell 12.3% to $753 million, and reported diluted EPS fell 11.7% to $1.96. Reported operating income decreased 8.9% to $1.034 billion; reported operating margin was 15.9%. Results included $293 million in goodwill impairment.
Adjusted diluted EPS rose 10.3% to $3.52, and adjusted operating income margin rose 60 basis points to 26.2%. Stryker repurchased $1.0 billion of common stock during the quarter; in October 2026, its board approved a $3.0 billion increase to the existing repurchase program. Full-year 2026 guidance is 6.5% to 7.0% organic net sales growth and $14.80 to $14.90 adjusted net earnings per diluted share. Chair and CEO Kevin A. Lobo said results fell short of expectations and said Stryker expects solid Q4 performance and good momentum into 2027.
2 points · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet sales increased 7.7% to $6.5 billion in Q3 2026.
- Moderate pointAdjusted diluted EPS rose 10.3% to $3.52.
Negative
- Moderate pointReported net earnings declined 12.3% to $753 million.
- Moderate pointReported operating income declined 8.9% to $1.034 billion.
Filing Explained
The board approved a
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales: $6.5 billion
Reported net earnings: $753 million
Reported diluted EPS: $1.96
+5 more
8 metrics
Net sales
$6.5 billion
Third quarter 2026; increased 7.7%
Reported net earnings
$753 million
Third quarter 2026; decreased 12.3%
Reported diluted EPS
$1.96
Third quarter 2026; decreased 11.7%
Adjusted diluted EPS
$3.52
Third quarter 2026; increased 10.3%
Adjusted operating income margin
26.2%
Third quarter 2026; increased 60 basis points
Common stock repurchased
$1.0 billion
Third quarter 2026
Share repurchase program increase
$3.0 billion
Approved by the board in October 2026
Full-year 2026 guidance
6.5% to 7.0% organic net sales growth; $14.80 to $14.90 adjusted net earnings per diluted share
Updated outlook for full-year 2026
Key Terms
organic net sales, constant currency, adjusted operating income margin, goodwill impairment
4 terms
organic net sales financial
"Organic net sales increased 7.7% in the quarter"
Organic net sales represent the revenue generated from a company's core business activities, excluding the effects of acquisitions, divestments, or currency changes. It shows how well the company is growing through its existing products and services, similar to tracking how a plant grows from its own roots rather than by adding new plants. Investors use this measure to assess the true growth and health of a company's ongoing operations.
constant currency financial
"increased 7.7% in the quarter on both a reported and constant currency basis"
Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.
adjusted operating income margin financial
"adjusted operating income margin was 26.2% in the quarter"
Adjusted operating income margin is the percentage of revenue that a company keeps as profit from its normal, day-to-day business after removing one-time events, restructuring costs, and other unusual or accounting-only items. Investors use it to see how efficiently the core business turns sales into operating profit — like judging a car’s fuel efficiency after ignoring occasional detours — because it gives a clearer view of underlying profitability and comparability over time.
goodwill impairment financial
"Goodwill impairment | $ | 293"
Goodwill impairment occurs when a company’s valued reputation or brand strength, known as goodwill, is found to be worth less than previously recorded on its financial statements. This usually happens when the company's performance declines or market conditions change, signaling that the expected benefits from acquisitions or brand value are no longer as strong. It matters to investors because it can indicate that a company's assets are less valuable than initially thought, potentially affecting its overall financial health.
Earnings Snapshot
Net sales: $6.5 billion · Guidance included
Third quarter 2026
Net sales
$6.5 billion
+7.7%
Reported net earnings
$753 million
-12.3%
Reported diluted EPS
$1.96
-11.7%
Adjusted diluted EPS
$3.52
+10.3%
Adjusted operating income margin
26.2%
+60 basis points
Guidance
Full-year 2026 organic net sales growth of 6.5% to 7.0% and adjusted net earnings per diluted share of $14.80 to $14.90.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were SYK's third-quarter 2026 sales and earnings?
Stryker reported $6.5 billion in third-quarter net sales, up 7.7%, and $753 million in net earnings, down 12.3%. Reported diluted EPS was $1.96, down 11.7%.
What is Stryker's 2026 financial guidance?
Stryker expects full-year 2026 organic net sales growth of 6.5% to 7.0% and adjusted net earnings per diluted share of $14.80 to $14.90.
How do pricing and foreign exchange factor into SYK's 2026 outlook?
Stryker's sales guidance includes a modestly positive pricing impact. Foreign exchange is expected to have a slightly favorable impact on both sales and adjusted net earnings per diluted share if rates hold near current levels.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2026
(Exact name of registrant as specified in its charter)
| (State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||||||||
| | |||||||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||||||||
| (Registrant’s telephone number, including area code) | |||||||||||||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||
Stryker Corporation issued a press release on October 29, 2026 announcing its third quarter 2026 operating results. A copy of this press release is attached hereto as Exhibit 99.1.
The information furnished in this report, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS | ||||
| (d) | Exhibits | ||||||||||
| 99.1 | Stryker reports third quarter 2026 operating results, press release dated October 29, 2026 | ||||||||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | ||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STRYKER CORPORATION | |||||||||||
| (Registrant) | |||||||||||
| Date: | October 29, 2026 | /s/ PRESTON W. WELLS | |||||||||
| Preston W. Wells | |||||||||||
| Vice President, Chief Financial Officer | |||||||||||
Exhibit 99.1
STRYKER REPORTS THIRD QUARTER 2026 OPERATING RESULTS
Portage, Michigan - October 29, 2026 - Stryker (NYSE:SYK) reported operating results for the third quarter of 2026:
Third Quarter Results
•Reported net sales increased 7.7% to $6.5 billion
•Organic net sales increased 7.7%
•Reported operating income margin of 15.9%
•Adjusted operating income margin(1) increased 60 bps to 26.2%
•Reported EPS decreased 11.7% to $1.96
•Adjusted EPS(1) increased 10.3% to $3.52
| Third Quarter Net Sales Growth Overview | |||||||||||||||||||||||||||||
| Reported | Foreign Currency Exchange | Constant Currency | Acquisitions / Divestitures | Organic | |||||||||||||||||||||||||
| MedSurg and Neurotechnology | 9.2 | % | — | % | 9.2 | % | 0.1 | % | 9.1 | % | |||||||||||||||||||
| Orthopaedics | 5.7 | (0.2) | 5.9 | — | 5.9 | ||||||||||||||||||||||||
| Total | 7.7 | % | — | % | 7.7 | % | — | % | 7.7 | % | |||||||||||||||||||
“We delivered 7.7% organic sales growth and double-digit adjusted earnings growth in the quarter,” said Kevin A. Lobo, Chair and CEO. “While, in absolute terms, this reflected good overall performance, it did fall short of our expectations. The underlying fundamentals of the business remain strong, and we expect a solid performance in Q4 and good momentum heading into 2027.”
Sales Analysis
Consolidated net sales of $6.5 billion increased 7.7% in the quarter on both a reported and constant currency basis. Organic net sales increased 7.7% in the quarter primarily driven by increased unit volume.
MedSurg and Neurotechnology net sales of $3.7 billion increased 9.2% in the quarter on both a reported and constant currency basis. Organic net sales increased 9.1% in the quarter primarily driven by increased unit volume.
Orthopaedics net sales of $2.9 billion increased 5.7% in the quarter and 5.9% in constant currency. Organic net sales increased 5.9% in the quarter from increased unit volume.
Earnings Analysis
Reported net earnings of $753 million decreased 12.3% in the quarter. Reported net earnings per diluted share of $1.96 decreased 11.7% in the quarter. Reported gross profit margin and reported operating income margin were 65.2% and 15.9% in the quarter. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, structural optimization and other special charges, goodwill and other impairments, costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin(1) was 65.4% in the quarter, and adjusted operating income margin(1) was 26.2% in the quarter. Adjusted net earnings(1) of $1.4 billion increased 10.1% in the quarter. Adjusted net earnings per diluted share(1) of $3.52 increased 10.3% in the quarter.
Share Repurchases
We repurchased $1.0 billion of our common stock in the third quarter of 2026.
In October 2026 our Board of Directors approved an increase of $3.0 billion to our existing share repurchase program. The manner, timing and amount of repurchases are determined by management based on an evaluation of market conditions, stock price, and other factors and are subject to regulatory considerations. Purchases may be made from time to time in the open market, in privately negotiated transactions, accelerated share repurchase programs or otherwise.
1
2026 Outlook
We are updating our full year 2026 guidance and now expect organic net sales growth(2) in the range of 6.5% to 7.0% and adjusted net earnings per diluted share(2) to be in the range of $14.80 to $14.90. Our sales guidance includes a modestly positive pricing impact. Additionally, foreign exchange is expected to have a slightly favorable impact on both sales and adjusted net earnings per diluted share(2) should rates hold near current levels.
(1) A reconciliation of the non-GAAP financial measures: adjusted gross profit margin, adjusted operating income and adjusted operating income margin, adjusted net earnings and adjusted net earnings per diluted share, to the most directly comparable GAAP measures: gross profit margin, operating income and operating income margin, net earnings and net earnings per diluted share, and other important information accompanies this press release.
(2) We are unable to present a quantitative reconciliation of our expected net sales growth to expected organic net sales growth as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisitions and divestitures and the impact of foreign currency exchange rates. We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of structural optimization and other special charges, acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.
Conference Call on Thursday, October 29, 2026
As previously announced, we will host a conference call on Thursday, October 29, 2026 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter ended September 30, 2026 and provide an operational update.
Please register for this conference call at: https://stryker-3q2026-earnings.open-exchange.net. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry. Registration is open throughout the live call. To ensure you are connected prior to the beginning of the call, we suggest registering a minimum of 15 minutes before the start of the call.
A simultaneous webcast of the call will be accessible via the Investor Relations page of our website at www.stryker.com. For those not planning to ask a question of management, we recommend listening via the webcast. Please allow 15 minutes to register, download and install any necessary software.
Following the conference call, a replay will be available on our website up to one year from the time of the earnings call.
Caution Concerning Forward-Looking Statements
This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such risks and uncertainties include, but are not limited to: weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our products; geopolitical risks, including from tariffs and the potential for further changes in trade policies and international conflicts, which have led to and could continue to lead to, among other things, increased market volatility; pricing pressures generally, including cost-containment measures that have adversely affected and could in the future adversely affect the price of or demand for our products; changes in foreign currency exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect approval of new products by the United States Food and Drug Administration and foreign regulatory agencies; inflationary pressures; increased interest rates or interest rate volatility; supply chain disruptions; changes in labor markets; changes in coverage and reimbursement levels from third-party payors; changes in the competitive environment; breaches, failures or other disruptions of our or our vendors’ or customers’ information technology systems or products resulting from cyber-attack, data leakage, unauthorized access or theft, including the cybersecurity incident first reported on March 11, 2026; a significant increase in product liability claims; the ultimate total cost with respect to recall-related and other regulatory and quality matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; changes in tax laws and regulations; the impact of legislation to reform the healthcare system in the United States or other countries; costs to comply with medical device regulations; changes in financial markets; changes in our credit ratings; our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes; our ability to realize any anticipated cost savings; risks relating to climate change or other environmental, social and governance and sustainability related matters; and the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties. Additional information concerning these and other factors is contained in our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements, except to the extent required by law.
Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology and Orthopaedics that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually. More information is available at www.stryker.com.
For investor inquiries:
Nick Mead, Vice President, Investor Relations at 269-385-2600 or nick.mead@stryker.com
For media inquiries:
Kim Montagnino, Vice President, Chief Communications Officer at 269-385-2600 or kim.montagnino@stryker.com
2
| STRYKER CORPORATION | |||||||||||||||||||||||||||||||||||
| For the Three and Nine Months September 30 | |||||||||||||||||||||||||||||||||||
| (Unaudited - Millions of Dollars, Except Per Share Amounts) | |||||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Net sales | $ | 6,520 | $ | 6,057 | 7.7 | % | $ | 19,129 | $ | 17,945 | 6.6 | % | |||||||||||||||||||||||
| Cost of sales | 2,272 | 2,205 | 3.0 | 6,573 | 6,508 | 1.0 | |||||||||||||||||||||||||||||
| Gross profit | $ | 4,248 | $ | 3,852 | 10.3 | % | $ | 12,556 | $ | 11,437 | 9.8 | % | |||||||||||||||||||||||
| % of sales | 65.2 | % | 63.6 | % | 65.6 | % | 63.7 | % | |||||||||||||||||||||||||||
| Research, development and engineering expenses | 433 | 410 | 5.6 | 1,280 | 1,222 | 4.7 | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 2,313 | 2,045 | 13.1 | 6,823 | 6,424 | 6.2 | |||||||||||||||||||||||||||||
| Amortization of intangible assets | 175 | 189 | (7.4) | 530 | 543 | (2.4) | |||||||||||||||||||||||||||||
| Goodwill and other impairments | 293 | 73 | nm | 294 | 163 | nm | |||||||||||||||||||||||||||||
| Total operating expenses | $ | 3,214 | $ | 2,717 | 18.3 | % | $ | 8,927 | $ | 8,352 | 6.9 | % | |||||||||||||||||||||||
| Operating income | $ | 1,034 | $ | 1,135 | (8.9) | % | $ | 3,629 | $ | 3,085 | 17.6 | % | |||||||||||||||||||||||
| % of sales | 15.9 | % | 18.7 | % | 19.0 | % | 17.2 | % | |||||||||||||||||||||||||||
| Other income (expense), net | (37) | (106) | (65.1) | (218) | (276) | (21.0) | |||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 997 | $ | 1,029 | (3.1) | % | $ | 3,411 | $ | 2,809 | 21.4 | % | |||||||||||||||||||||||
| Income taxes | 244 | 170 | 43.5 | 637 | 412 | 54.6 | |||||||||||||||||||||||||||||
| Net earnings | $ | 753 | $ | 859 | (12.3) | % | $ | 2,774 | $ | 2,397 | 15.7 | % | |||||||||||||||||||||||
| Net earnings per share of common stock: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 1.97 | $ | 2.25 | (12.4) | % | $ | 7.24 | $ | 6.27 | 15.5 | % | |||||||||||||||||||||||
| Diluted | $ | 1.96 | $ | 2.22 | (11.7) | % | $ | 7.19 | $ | 6.20 | 16.0 | % | |||||||||||||||||||||||
| Weighted-average shares outstanding (in millions): | |||||||||||||||||||||||||||||||||||
| Basic | 382.2 | 382.4 | 382.9 | 382.1 | |||||||||||||||||||||||||||||||
| Diluted | 384.7 | 386.7 | 385.8 | 386.5 | |||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| September 30 | December 31 | ||||||||||
| 2026 | 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 3,271 | $ | 4,011 | |||||||
| Marketable securities | — | 89 | |||||||||
| Accounts receivable, net | 3,693 | 4,039 | |||||||||
| Inventories | 5,747 | 5,310 | |||||||||
| Prepaid expenses and other current assets | 1,472 | 1,306 | |||||||||
| Total current assets | $ | 14,183 | $ | 14,755 | |||||||
| Property, plant and equipment, net | 4,054 | 3,876 | |||||||||
| Goodwill and other intangibles, net | 24,868 | 24,972 | |||||||||
| Noncurrent deferred income tax assets | 901 | 1,098 | |||||||||
| Other noncurrent assets | 3,241 | 3,143 | |||||||||
| Total assets | $ | 47,247 | $ | 47,844 | |||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities | $ | 6,500 | $ | 7,794 | |||||||
| Long-term debt, excluding current maturities | 14,176 | 14,859 | |||||||||
| Income taxes | 413 | 402 | |||||||||
| Other noncurrent liabilities | 2,701 | 2,369 | |||||||||
| Shareholders' equity | 23,457 | 22,420 | |||||||||
| Total liabilities and shareholders' equity | $ | 47,247 | $ | 47,844 | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| Nine Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net earnings | $ | 2,774 | $ | 2,397 | |||||||
| Depreciation | 361 | 334 | |||||||||
| Amortization of intangible assets | 530 | 543 | |||||||||
| Changes in operating assets, liabilities, income taxes payable and other, net | (362) | (373) | |||||||||
| Net cash provided by operating activities | $ | 3,303 | $ | 2,901 | |||||||
| Investing activities | |||||||||||
| Acquisitions, net of cash acquired | $ | (481) | $ | (4,950) | |||||||
| Proceeds/(Purchases) of short-term investments | — | 750 | |||||||||
| Purchases of property, plant and equipment | (605) | (493) | |||||||||
| Other investing, net | 75 | 132 | |||||||||
| Net cash used in investing activities | $ | (1,011) | $ | (4,561) | |||||||
| Financing activities | |||||||||||
| Borrowings (payments) of debt, net | $ | (753) | $ | 2,330 | |||||||
| Payments of dividends | (1,012) | (963) | |||||||||
| Repurchases of common stock | (1,000) | — | |||||||||
| Other financing, net | (233) | (161) | |||||||||
| Net cash provided by (used in) financing activities | $ | (2,998) | $ | 1,206 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (34) | 58 | |||||||||
| Change in cash and cash equivalents | $ | (740) | $ | (396) | |||||||
3
| STRYKER CORPORATION | ||
| For the Three and Nine Months September 30 | ||
| (Unaudited - Millions of Dollars) | ||
| SALES GROWTH ANALYSIS | |||||||||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||||
| Percentage Change | Percentage Change | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | As Reported | Constant Currency | 2026 | 2025 | As Reported | Constant Currency | ||||||||||||||||||||||||||||||||||
| MedSurg and Neurotechnology: | |||||||||||||||||||||||||||||||||||||||||
| Instruments | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 835 | $ | 797 | 4.8 | % | 4.8 | % | $ | 2,441 | $ | 2,275 | 7.4 | % | 7.4 | % | |||||||||||||||||||||||||
| International | 161 | 152 | 6.5 | 7.1 | 478 | 430 | 11.3 | 8.8 | |||||||||||||||||||||||||||||||||
| Total | $ | 996 | $ | 949 | 5.1 | % | 5.2 | % | $ | 2,919 | $ | 2,705 | 8.0 | % | 7.6 | % | |||||||||||||||||||||||||
| Endoscopy | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 839 | $ | 743 | 13.0 | % | 13.0 | % | $ | 2,359 | $ | 2,195 | 7.5 | % | 7.5 | % | |||||||||||||||||||||||||
| International | 182 | 153 | 18.0 | 18.5 | 534 | 467 | 14.2 | 11.4 | |||||||||||||||||||||||||||||||||
| Total | $ | 1,021 | $ | 896 | 13.9 | % | 14.0 | % | $ | 2,893 | $ | 2,662 | 8.7 | % | 8.2 | % | |||||||||||||||||||||||||
| Medical | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 910 | $ | 827 | 10.0 | % | 10.0 | % | $ | 2,602 | $ | 2,469 | 5.4 | % | 5.4 | % | |||||||||||||||||||||||||
| International | 171 | 158 | 8.1 | 8.5 | 503 | 451 | 11.4 | 8.2 | |||||||||||||||||||||||||||||||||
| Total | $ | 1,081 | $ | 985 | 9.7 | % | 9.8 | % | $ | 3,105 | $ | 2,920 | 6.3 | % | 5.8 | % | |||||||||||||||||||||||||
| Vascular | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 320 | $ | 283 | 13.0 | % | 13.0 | % | $ | 850 | $ | 754 | 12.7 | % | 12.7 | % | |||||||||||||||||||||||||
| International | 246 | 242 | 2.1 | 0.8 | 729 | 675 | 8.0 | 4.9 | |||||||||||||||||||||||||||||||||
| Total | $ | 566 | $ | 525 | 8.0 | % | 7.4 | % | $ | 1,579 | $ | 1,429 | 10.5 | % | 9.0 | % | |||||||||||||||||||||||||
| MedSurg and Neurotechnology | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 2,904 | $ | 2,650 | 9.6 | % | 9.6 | % | $ | 8,252 | $ | 7,693 | 7.3 | % | 7.3 | % | |||||||||||||||||||||||||
| International | 760 | 705 | 7.8 | 7.7 | 2,244 | 2,023 | 10.9 | 8.0 | |||||||||||||||||||||||||||||||||
| Total | $ | 3,664 | $ | 3,355 | 9.2 | % | 9.2 | % | $ | 10,496 | $ | 9,716 | 8.0 | % | 7.4 | % | |||||||||||||||||||||||||
| Orthopaedics: | |||||||||||||||||||||||||||||||||||||||||
| Knees | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 458 | $ | 452 | 1.3 | % | 1.3 | % | $ | 1,418 | $ | 1,376 | 3.0 | % | 3.0 | % | |||||||||||||||||||||||||
| International | 177 | 176 | 0.5 | 1.1 | 580 | 531 | 9.3 | 6.6 | |||||||||||||||||||||||||||||||||
| Total | $ | 635 | $ | 628 | 1.1 | % | 1.2 | % | $ | 1,998 | $ | 1,907 | 4.8 | % | 4.0 | % | |||||||||||||||||||||||||
| Hips | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 277 | $ | 279 | (0.6) | % | (0.6) | % | $ | 849 | $ | 831 | 2.2 | % | 2.2 | % | |||||||||||||||||||||||||
| International | 176 | 178 | (1.7) | (0.8) | 543 | 535 | 1.4 | (0.6) | |||||||||||||||||||||||||||||||||
| Total | $ | 453 | $ | 457 | (1.0) | % | (0.7) | % | $ | 1,392 | $ | 1,366 | 1.9 | % | 1.1 | % | |||||||||||||||||||||||||
| Trauma and Extremities | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 735 | $ | 703 | 4.5 | % | 4.5 | % | $ | 2,293 | $ | 2,118 | 8.2 | % | 8.2 | % | |||||||||||||||||||||||||
| International | 275 | 257 | 7.5 | 8.4 | 824 | 744 | 10.9 | 7.9 | |||||||||||||||||||||||||||||||||
| Total | $ | 1,010 | $ | 960 | 5.3 | % | 5.5 | % | $ | 3,117 | $ | 2,862 | 8.9 | % | 8.1 | % | |||||||||||||||||||||||||
| Ortho Tech | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 576 | $ | 487 | 18.1 | % | 18.1 | % | $ | 1,573 | $ | 1,429 | 10.0 | % | 10.0 | % | |||||||||||||||||||||||||
| International | 178 | 164 | 9.0 | 9.5 | 544 | 488 | 11.6 | 9.3 | |||||||||||||||||||||||||||||||||
| Total | $ | 754 | $ | 651 | 15.8 | % | 16.0 | % | $ | 2,117 | $ | 1,917 | 10.4 | % | 9.8 | % | |||||||||||||||||||||||||
| $ | 2,852 | $ | 2,696 | 5.8 | % | 6.0 | % | $ | 8,624 | $ | 8,052 | 7.1 | % | 6.4 | % | ||||||||||||||||||||||||||
| Spinal Implants | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | — | $ | — | — | % | — | % | $ | — | $ | 118 | (100.0) | % | (100.0) | % | |||||||||||||||||||||||||
| International | 4 | 6 | (43.9) | (45.4) | 9 | 59 | (85.7) | (87.1) | |||||||||||||||||||||||||||||||||
| Total | $ | 4 | $ | 6 | (43.9) | % | (45.4) | % | $ | 9 | $ | 177 | (95.2) | % | (95.5) | % | |||||||||||||||||||||||||
| Orthopaedics | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 2,046 | $ | 1,921 | 6.5 | % | 6.5 | % | $ | 6,133 | $ | 5,872 | 4.4 | % | 4.4 | % | |||||||||||||||||||||||||
| International | 810 | 781 | 3.8 | 4.5 | 2,500 | 2,357 | 6.1 | 3.5 | |||||||||||||||||||||||||||||||||
| Total | $ | 2,856 | $ | 2,702 | 5.7 | % | 5.9 | % | $ | 8,633 | $ | 8,229 | 4.9 | % | 4.1 | % | |||||||||||||||||||||||||
| Geographic: | |||||||||||||||||||||||||||||||||||||||||
| United States | $ | 4,950 | $ | 4,571 | 8.3 | % | 8.3 | % | $ | 14,385 | $ | 13,565 | 6.0 | % | 6.0 | % | |||||||||||||||||||||||||
| International | 1,570 | 1,486 | 5.7 | 6.0 | 4,744 | 4,380 | 8.3 | 5.6 | |||||||||||||||||||||||||||||||||
| Total | $ | 6,520 | $ | 6,057 | 7.7 | % | 7.7 | % | $ | 19,129 | $ | 17,945 | 6.6 | % | 5.9 | % | |||||||||||||||||||||||||
Note: In the first quarter 2026 we announced a change in our organizational structure. Our new Ortho Tech business combines the orthopaedic instruments portfolio (Orthopaedic Instruments) from Instruments with Other Orthopaedics. In addition, Neuro Cranial and the spine enabling technologies portfolio (Enabling Technologies) from Other Orthopaedics were combined with the remaining Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $535 and $492 and Other Orthopaedics of $219 and $159 for the three months 2026 and 2025. For the nine months 2026 and 2025 Ortho Tech includes sales related to Orthopaedic Instruments of $1,547 and $1,477 and Other Orthopaedics of $570 and $440. Instruments includes sales related to Neuro Cranial of $670 and $637 and Enabling Technologies of $28 and $45 for the three months 2026 and 2025. For the nine months 2026 and 2025 Instruments includes sales related to Neuro Cranial of $1,957 and $1,816 and Enabling Technologies of $82 and $108. We have reflected these changes in all historical periods presented.
4
SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including: percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.
To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rates excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded. These adjustments are irregular in timing and may not be indicative of our past and future performance.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, income taxes, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of our business. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures. The weighted-average diluted shares outstanding used in the calculation of adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.
| STRYKER CORPORATION | |||||||||||||||||||||||||||||
| For the Three and Nine Months September 30 | |||||||||||||||||||||||||||||
| (Unaudited - Millions of Dollars, Except Per Share Amounts) | |||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures | |||||||||||||||||||||||||||||
| Three Months 2026 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||||||
| Reported | $ | 4,248 | $ | 2,313 | $ | 433 | $ | 1,034 | $ | (37) | $ | 244 | $ | 753 | 24.5 | % | $ | 1.96 | |||||||||||
| Reported percent net sales | 65.2 | % | 35.5 | % | 6.6 | % | 15.9 | % | (0.6) | % | nm | 11.5 | % | ||||||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||||||
| Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Other acquisition and integration-related (a) | 6 | (5) | (6) | 17 | — | 3 | 14 | — | 0.04 | ||||||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 175 | — | 33 | 142 | 0.5 | 0.37 | ||||||||||||||||||||
| Structural optimization and other special charges (b) | 12 | (137) | (4) | 153 | (54) | 23 | 76 | 0.8 | 0.20 | ||||||||||||||||||||
| Goodwill and other impairments (c) | — | — | — | 293 | — | — | 293 | (4.8) | 0.76 | ||||||||||||||||||||
| Medical device regulations (d) | — | — | (6) | 6 | — | 1 | 5 | — | 0.01 | ||||||||||||||||||||
| Recall-related matters (e) | — | 4 | — | (4) | — | (2) | (2) | (0.1) | — | ||||||||||||||||||||
| Regulatory and legal matters (f) | — | (32) | — | 32 | — | 6 | 26 | 0.1 | 0.07 | ||||||||||||||||||||
| Tax matters (g) | — | — | — | — | — | (50) | 50 | (5.0) | 0.11 | ||||||||||||||||||||
| Reversal of 2025 tariffs | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Adjusted | $ | 4,266 | $ | 2,143 | $ | 417 | $ | 1,706 | $ | (91) | $ | 258 | $ | 1,357 | 16.0 | % | $ | 3.52 | |||||||||||
| Adjusted percent net sales | 65.4 | % | 32.8 | % | 6.4 | % | 26.2 | % | (1.4) | % | nm | 20.8 | % | ||||||||||||||||
5
| Three Months 2025 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||||||
| Reported | $ | 3,852 | $ | 2,045 | $ | 410 | $ | 1,135 | $ | (106) | $ | 170 | $ | 859 | 16.5 | % | $ | 2.22 | |||||||||||
| Reported percent net sales | 63.6 | % | 33.8 | % | 6.8 | % | 18.7 | % | (1.8) | % | nm | 14.2 | % | ||||||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||||||
| Inventory stepped-up to fair value | 61 | — | — | 61 | — | 15 | 46 | 0.6 | 0.12 | ||||||||||||||||||||
| Other acquisition and integration-related (a) | 5 | (33) | (1) | 39 | — | 6 | 33 | 0.1 | 0.08 | ||||||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 189 | — | 39 | 150 | 1.2 | 0.39 | ||||||||||||||||||||
| Structural optimization and other special charges (b) | 15 | (26) | — | 41 | (10) | 3 | 28 | (0.1) | 0.07 | ||||||||||||||||||||
| Goodwill and other impairments (c) | — | — | — | 73 | — | 15 | 58 | 0.4 | 0.16 | ||||||||||||||||||||
| Medical device regulations (d) | — | — | (11) | 11 | — | 3 | 8 | 0.1 | 0.02 | ||||||||||||||||||||
| Recall-related matters (e) | — | (1) | — | 1 | — | — | 1 | — | — | ||||||||||||||||||||
| Regulatory and legal matters (f) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Tax matters (g) | — | — | — | — | — | (50) | 50 | (4.8) | 0.13 | ||||||||||||||||||||
| Adjusted | $ | 3,933 | $ | 1,985 | $ | 398 | $ | 1,550 | $ | (116) | $ | 201 | $ | 1,233 | 14.0 | % | $ | 3.19 | |||||||||||
| Adjusted percent net sales | 65.0 | % | 32.8 | % | 6.6 | % | 25.6 | % | (1.9) | % | nm | 20.4 | % | ||||||||||||||||
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
| Three Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Termination of sales relationships | $ | 1 | $ | — | |||||||
| Employee retention and workforce reductions | 1 | 11 | |||||||||
| Changes in the fair value of contingent consideration | 1 | 12 | |||||||||
| Manufacturing integration costs | 17 | 7 | |||||||||
| Other integration-related activities (e.g., deal costs and legal entity rationalization) | (3) | 9 | |||||||||
| Adjustments to Operating Income | $ | 17 | $ | 39 | |||||||
| Adjustments to Income Taxes | $ | 3 | $ | 6 | |||||||
| Adjustments to Net Earnings | $ | 14 | $ | 33 | |||||||
(b) Structural optimization and other special charges represent the costs associated with:
| Three Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Employee retention and workforce reductions | $ | 7 | $ | 6 | |||||||
| Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 8 | 8 | |||||||||
| Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) | (5) | 9 | |||||||||
| Termination of sales relationships in certain countries | 37 | 2 | |||||||||
| Spinal Implants sale related | 77 | 9 | |||||||||
| Other charges | 29 | 7 | |||||||||
| Adjustments to Operating Income | $ | 153 | $ | 41 | |||||||
| Adjustments to Other Income (Expense), Net | $ | (54) | $ | (10) | |||||||
| Adjustments to Income Taxes | $ | 23 | $ | 3 | |||||||
| Adjustments to Net Earnings | $ | 76 | $ | 28 | |||||||
(c) Goodwill and other impairments represent the costs associated with:
| Three Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Goodwill impairment | $ | 293 | $ | — | |||||||
| Certain long-lived and intangible asset write-offs and impairments | — | 22 | |||||||||
| Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | — | 51 | |||||||||
| Adjustments to Operating Income | $ | 293 | $ | 73 | |||||||
| Adjustments to Income Taxes | $ | — | $ | 15 | |||||||
| Adjustments to Net Earnings | $ | 293 | $ | 58 | |||||||
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
6
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
| Three Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $ | (56) | $ | (61) | |||||||
| Other tax matters | 6 | 11 | |||||||||
| Adjustments to Income Taxes | $ | (50) | $ | (50) | |||||||
| Adjustments to Other Income (Expense), Net | $ | — | $ | — | |||||||
| Adjustments to Net Earnings | $ | 50 | $ | 50 | |||||||
| Nine Months 2026 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||||||
| Reported | $ | 12,556 | $ | 6,823 | $ | 1,280 | $ | 3,629 | $ | (218) | $ | 637 | $ | 2,774 | 18.7 | % | $ | 7.19 | |||||||||||
| Reported percent net sales | 65.6 | % | 35.7 | % | 6.7 | % | 19.0 | % | (1.1) | % | nm | 14.5 | % | ||||||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||||||
| Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Other acquisition and integration-related (a) | 15 | (32) | (14) | 61 | — | 10 | 51 | — | 0.14 | ||||||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 530 | — | 96 | 434 | 0.4 | 1.12 | ||||||||||||||||||||
| Structural optimization and other special charges (b) | 31 | (330) | (5) | 366 | (71) | 68 | 227 | 0.6 | 0.59 | ||||||||||||||||||||
| Goodwill and other impairments (c) | — | — | — | 294 | — | — | 294 | (1.3) | 0.76 | ||||||||||||||||||||
| Medical device regulations (d) | — | — | (16) | 16 | — | 3 | 13 | — | 0.03 | ||||||||||||||||||||
| Recall-related matters (e) | — | (8) | — | 8 | — | 1 | 7 | — | 0.02 | ||||||||||||||||||||
| Regulatory and legal matters (f) | — | (38) | — | 38 | — | 7 | 31 | — | 0.08 | ||||||||||||||||||||
| Tax matters (g) | — | — | — | — | — | (87) | 87 | (2.6) | 0.22 | ||||||||||||||||||||
| Reversal of 2025 tariffs | (158) | — | — | (158) | — | (25) | (133) | — | (0.34) | ||||||||||||||||||||
| Adjusted | $ | 12,444 | $ | 6,415 | $ | 1,245 | $ | 4,784 | $ | (289) | $ | 710 | $ | 3,785 | 15.8 | % | $ | 9.81 | |||||||||||
| Adjusted percent net sales | 65.1 | % | 33.5 | % | 6.5 | % | 25.0 | % | (1.5) | % | nm | 19.8 | % | ||||||||||||||||
| Nine Months 2025 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||||||
| Reported | $ | 11,437 | $ | 6,424 | $ | 1,222 | $ | 3,085 | $ | (276) | $ | 412 | $ | 2,397 | 14.7 | % | $ | 6.20 | |||||||||||
| Reported percent net sales | 63.7 | % | 35.8 | % | 6.8 | % | 17.2 | % | (1.5) | % | nm | 13.4 | % | ||||||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||||||
| Inventory stepped-up to fair value | 160 | — | — | 160 | — | 39 | 121 | 0.5 | 0.31 | ||||||||||||||||||||
| Other acquisition and integration-related (a) | 19 | (280) | (3) | 302 | — | 32 | 270 | (0.4) | 0.70 | ||||||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 543 | — | 112 | 431 | 1.2 | 1.11 | ||||||||||||||||||||
| Structural optimization and other special charges (b) | 43 | (47) | (3) | 93 | (19) | 15 | 59 | 0.2 | 0.15 | ||||||||||||||||||||
| Goodwill and other impairments (c) | — | — | — | 163 | — | 46 | 117 | 0.8 | 0.32 | ||||||||||||||||||||
| Medical device regulations (d) | 1 | — | (29) | 30 | — | 7 | 23 | 0.1 | 0.06 | ||||||||||||||||||||
| Recall-related matters (e) | 52 | (4) | — | 56 | — | 9 | 47 | — | 0.12 | ||||||||||||||||||||
| Regulatory and legal matters (f) | — | (7) | — | 7 | — | 2 | 5 | — | 0.01 | ||||||||||||||||||||
| Tax matters (g) | — | — | — | — | — | (71) | 71 | (2.5) | 0.18 | ||||||||||||||||||||
| Adjusted | $ | 11,712 | $ | 6,086 | $ | 1,187 | $ | 4,439 | $ | (295) | $ | 603 | $ | 3,541 | 14.6 | % | $ | 9.16 | |||||||||||
| Adjusted percent net sales | 65.3 | % | 33.9 | % | 6.6 | % | 24.7 | % | (1.6) | % | nm | 19.7 | % | ||||||||||||||||
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
| Nine Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Termination of sales relationships | $ | 7 | $ | — | |||||||
| Employee retention and workforce reductions | 1 | 56 | |||||||||
| Changes in the fair value of contingent consideration | 10 | 13 | |||||||||
| Manufacturing integration costs | 27 | 14 | |||||||||
| Stock compensation payments upon a change in control | — | 139 | |||||||||
| Other integration-related activities (e.g., deal costs and legal entity rationalization) | 16 | 80 | |||||||||
| Adjustments to Operating Income | $ | 61 | $ | 302 | |||||||
| Adjustments to Income Taxes | $ | 10 | $ | 32 | |||||||
| Adjustments to Net Earnings | $ | 51 | $ | 270 | |||||||
7
(b) Structural optimization and other special charges represent the costs associated with:
| Nine Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Employee retention and workforce reductions | $ | 20 | $ | 36 | |||||||
| Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 17 | 20 | |||||||||
| Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) | 6 | 2 | |||||||||
| Termination of sales relationships in certain countries | 124 | (2) | |||||||||
| Spinal Implants sale related | 128 | 17 | |||||||||
| Other charges | 71 | 20 | |||||||||
| Adjustments to Operating Income | $ | 366 | $ | 93 | |||||||
| Adjustments to Other Income (Expense), Net | $ | (71) | $ | (19) | |||||||
| Adjustments to Income Taxes | $ | 68 | $ | 15 | |||||||
| Adjustments to Net Earnings | $ | 227 | $ | 59 | |||||||
(c) Goodwill and other impairments represent the costs associated with:
| Nine Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Goodwill impairment | $ | 293 | $ | — | |||||||
| Certain long-lived and intangible asset write-offs and impairments | — | 108 | |||||||||
| Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 1 | 55 | |||||||||
| Adjustments to Operating Income | $ | 294 | $ | 163 | |||||||
| Adjustments to Income Taxes | $ | — | $ | 46 | |||||||
| Adjustments to Net Earnings | $ | 294 | $ | 117 | |||||||
(d) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
| Nine Months | |||||||||||
| 2026 | 2025 | ||||||||||
| Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $ | (131) | $ | (153) | |||||||
| Other tax matters | 44 | 82 | |||||||||
| Adjustments to Income Taxes | $ | (87) | $ | (71) | |||||||
| Adjustments to Other Income (Expense), Net | $ | — | $ | — | |||||||
| Adjustments to Net Earnings | $ | 87 | $ | 71 | |||||||
8