Stryker

(SYK) - Get Report

is still looking fit.

The orthopedic-device maker delivered another powerful quarter Tuesday, matching Wall Street's expectations for revenue growth and beating the consensus profit estimate by a penny. The company's core orthopedic implant business remained brisk, with sales there rising by 13% on a constant-currency basis during the latest period.

Like Wall Street in general, Baird analyst Suey Wong was looking for Stryker to increase revenue by 15% to $1.2 billion and post earnings of 44 cents a share -- up from 34 cents a year ago -- in the second quarter. The company posted a profit of 45 cents instead.

For Stryker's core orthopedic implant division, Wong had accurately forecast worldwide sales growth of 13%, with knee sales once again leading the way. He expressed particular excitement about Stryker's recently launched Triathlon knee, which he called the company's "most promising" new product in years. He predicted that Stryker would grow hip sales at a slower clip but reminded investors that the company, which last year saw hip sales spike on a new product launch, was facing tough year-over year comparisons.

Despite heavy investor focus on orthopedic implants, however, Wong continued to look for the fastest growth from another Stryker division.

"In MedSurg, our model currently calls for worldwide constant-currency sales growth of 22% this quarter, compared to 24% last quarter and the 19% to 21% delivered on a worldwide constant-currency basis over each of the prior six quarters," wrote Wong, who has a neutral rating on the stock. "In general, Stryker's MedSurg business continues to drive the company's overall business."

Looking ahead, however, Bear Stearns analyst Milton Hsu believes that Stryker's orthopedics unit could regain some power. He acknowledges that the company's hips and knees have both lost market share. But he is looking for new management and product launches to help turn the division around.

In the meantime, Hsu says concerns about orthopedic sales in general -- fueled by a sweeping industry probe -- appear to be overblown. The

Justice Department

is scrutinizing the lucrative financial arrangements between a number of orthopedic companies, including Stryker, and the surgeons who faithfully use their devices.

"While we expect the majority -- if not all -- of ortho vendors to be assessed with fines," writes Hsu, who has neutral rating on Stryker's shares, "we would be surprised if consulting contracts were disallowed completely in the future."

Stryker's stock rose 19 cents to $49.60 ahead of Tuesday's postclose update. The shares added 65 cents late Tuesday to $50.25.