Wrapping up Q3 earnings, we look at the numbers and key takeaways for the surgical equipment & consumables - diversified stocks, including BD (NYSE: BDX) and its peers.

The surgical equipment and consumables industry provides tools, devices, and disposable products essential for surgeries and medical procedures. These companies therefore benefit from relatively consistent demand, driven by the ongoing need for medical interventions, recurring revenue from consumables, and long-term contracts with hospitals and healthcare providers. However, the high costs of R&D and regulatory compliance, coupled with intense competition and pricing pressures from cost-conscious customers, can constrain profitability. Over the next few years, tailwinds include aging populations, which tend to need surgical interventions at higher rates. The increasing integration of AI and robotics into surgical procedures could also create opportunities for differentiation and innovation. However, the industry faces headwinds including potential supply chain vulnerabilities, evolving regulatory requirements, and more widespread efforts to make healthcare less costly.

The 5 surgical equipment & consumables - diversified stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.7%.

In light of this news, share prices of the companies have held steady as they are up 2.9% on average since the latest earnings results.

Weakest Q3: BD (NYSE: BDX)

With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE: BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.

BD reported revenues of $5.89 billion, up 8.3% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ EPS estimates but a slight miss of analysts’ constant currency revenue estimates.

"Our resilient business model and commitment to commercial and operational execution enabled us to deliver 3.9% organic growth in New BD along with substantial adjusted margin and earnings growth in fiscal 2025," said Tom Polen, chairman, CEO and president of BD.

Interestingly, the stock is up 6.9% since reporting and currently trades at $188.57.

Read our full report on BD here, it’s free for active Edge members.

Best Q3: STERIS (NYSE: STE)

With a mission critical role in preventing healthcare-associated infections, STERIS (NYSE: STE) provides infection prevention products, sterilization services, and medical equipment that help healthcare facilities and life science companies maintain sterile environments.

STERIS reported revenues of $1.46 billion, up 9.9% year on year, outperforming analysts’ expectations by 2%. The business had a very strong quarter with a solid beat of analysts’ constant currency revenue estimates and an impressive beat of analysts’ revenue estimates.

STERIS scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 9.7% since reporting. It currently trades at $266.70.

Is now the time to buy STERIS? Access our full analysis of the earnings results here, it’s free for active Edge members.

Zimmer Biomet (NYSE: ZBH)

With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.

Zimmer Biomet reported revenues of $2.00 billion, up 9.7% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ full-year EPS guidance estimates but revenue in line with analysts’ estimates.

Zimmer Biomet delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 14.2% since the results and currently trades at $88.50.

Read our full analysis of Zimmer Biomet’s results here.

CONMED (NYSE: CNMD)

With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.

CONMED reported revenues of $337.9 million, up 6.7% year on year. This number beat analysts’ expectations by 1%. Overall, it was a satisfactory quarter as it also recorded a narrow beat of analysts’ constant currency revenue estimates.

The stock is flat since reporting and currently trades at $44.71.

Read our full, actionable report on CONMED here, it’s free for active Edge members.

Solventum (NYSE: SOLV)

Founded in 1985, Solventum (NYSE: SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.

Solventum reported revenues of $2.10 billion, flat year on year. This print topped analysts’ expectations by 1.3%. It was a strong quarter as it also produced a solid beat of analysts’ organic revenue estimates and a narrow beat of analysts’ revenue estimates.

Solventum had the slowest revenue growth among its peers. The stock is up 11.5% since reporting and currently trades at $73.88.

Read our full, actionable report on Solventum here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.