Devices & Diagnostics

Stryker profits up, sales fall short

Despite a big uptick in surgical equipment sales, Stryker Corp. (NYSE:SYK) narrowly missed second-quarter revenue forecasts, but still managed to meet analysts’ estimates for a $319 million profit. Global net sales rose 7.6 percent to $1.76 billion, a 7.6 percent increase over the three months ended June 30, 2009. Much of the jump in revenues […]

Despite a big uptick in surgical equipment sales, Stryker Corp. (NYSE:SYK) narrowly missed second-quarter revenue forecasts, but still managed to meet analysts’ estimates for a $319 million profit.

Global net sales rose 7.6 percent to $1.76 billion, a 7.6 percent increase over the three months ended June 30, 2009. Much of the jump in revenues resulted from gains for Stryker’s MedSurg business, which climbed $101.5 million, or 16.4 percent, to $721.2 million for the quarter. Patient handling and emergency medical equipment showed the strongest growth within that segment, rising 22 percent year-over-year. Surgical navigation systems and other operating room tools also continued their sales rebound, rising 12 percent from depressed year-ago levels.

By comparison, Stryker’s orthopedic segment languished a bit, adding only $22.2 million, or 2.2 percent, to reach nearly $1.1 billion during the period. Sales of trauma-related implants, especially domestically, were a bright spot within the segment, gaining 7 percent and helping offset flat sales of knee and spinal implants.

Analysts, on average, had been expecting Stryker to generate $1.78 billion in overall sales. The near-miss spurred a 3.5 percent selloff in after-hours trading, with shares falling as much as $1.79 a share to $49.50, down from a $51.29-a-share close June 20.

Stryker’s second-quarter sales performance also slightly trailed the $1.8 billion reported during the January-to-March period. Favorable foreign currency exchange rates added about $11 million to the second-quarter results, significantly less than the $58 million a stronger dollar contributed to the company’s first-quarter sales totals.

Stryker executives stood by their 2010 outlook for a 5 percent to 8 percent jump in sales — or between $7.06 billion to $7.26 billion on a constant currency basis — on higher shipments of orthepedic and med-surg equipment from 2009 levels. Those forecasts assume a 1 percent to 2 percent negative impact from exchange rates during the current quarter and unfavorable currency effects trimming as much as a 1 percent from fourth-quarter sales.

The company also forecast net earnings of between $3.20 to $3.30 a share, up from $2.95 EPS in 2009. Its $319 million profit during the three months ended June 30 translates into an 80-cent profit for the quarter, up 9.5 percent from last year and matching Wall Street predictions.

The Massachusetts Medical Devices Journal is the online journal of the medical devices industry in the Commonwealth and New England, providing day-to-day coverage of the devices that save lives, the people behind them, and the burgeoning trends and developments within the industry.

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