A March cyberattack constrained growth and caused margin pressures for medtech firm Stryker, but leaders still expect the company to meet financial projections by the end of the year, according to an April 30 earnings call.
Stryker had to pause manufacturing for nearly three weeks due to the cybersecurity incident that has been linked to pro-Iran hackers. Financial accounting was disrupted when systems were offline, and some hospitals had to delay procedures.
“Those cases were able to proceed almost normally in many instances,” Stryker CFO Preston Wells said on the call. “As a result, the procedure happened, but given that our systems were down, we had some revenue recognition that still needs to be performed, so some of those activities and revenues will get pushed into [the] second quarter. Where we had to defer and reschedule surgeries — those will happen throughout the next three quarters, not necessarily all in the second quarter.”
Demand for the company’s products has also remained healthy, and customers stuck with the vendor through the disruption. Stryker Chair and CEO Kevin Lobo reported that he isn’t aware of the firm losing any business due to the cyberattack.
“I have been really overwhelmed by a lot of positive commentary from our customers about how we handled this incident,” Mr. Lobo said on the call. “They are very empathetic to having 40,000 laptops wiped, having computers wiped — it has not been easy to go through this — including people’s phones. The way we responded, the clarity of our communication, and how we were able to keep a lot of cases going in spite of this, were things for which they gave us high marks. You do not know until you are going through a crisis how things are really going to go. And we have come out of this very strong.”
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