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Stryker Corporation Message Board

  • bluecheese4u bluecheese4u Jan 23, 2013 6:21 PM Flag

    Stryker Reports Fourth Quarter and Full Year 2012 Results

    Stryker Reports Fourth Quarter and Full Year 2012 Results

    Kalamazoo, Michigan - January 23, 2013 - Stryker Corporation (NYSE:SYK) reported operating results for the fourth quarter and full year 2012:

    Quarter Highlights

    Net sales growth of 5.5% to $2.3 billion


    Reconstructive increased 6.7% as reported, 7.4% constant currency


    MedSurg increased 2.4% as reported, 2.7% constant currency


    Neurotechnology and Spine increased 9.7% as reported, 10.8% constant currency


    Adjusted net earnings(1) increased 11.8% to $436 million


    Adjusted diluted net earnings per share(2) increased 11.8% to $1.14


    Reported net earnings decreased 32.7% to $270 million


    Reported diluted net earnings per share decreased 32.4% to $0.71


    Full Year Highlights

    Net sales growth of 4.2% to $8.7 billion
    1.
    Reconstructive increased 3.1% as reported, 4.4% constant currency

    2.
    MedSurg increased 3.3% as reported, 4.2% constant currency

    3.
    Neurotechnology and Spine increased 9.2% as reported, 10.5% constant currency



    Adjusted net earnings(1) increased 7.7% to $1,560 million


    Adjusted diluted net earnings per share(2) increased 9.4% to $4.07


    Reported net earnings decreased 3.5% to $1,298 million


    Reported diluted net earnings per share decreased 1.7% to $3.39


    "We are pleased with our fourth quarter results and look to build on this momentum in 2013," commented Kevin A. Lobo, President and Chief Executive Officer.

    Sales Analysis

    Consolidated net sales of $2.3 billion and $8.7 billion increased 5.5% and 4.2% in the quarter and full year over the prior year, respectively. Net sales in the quarter grew by 7.5% due to increased unit volume and changes in product mix. Net sales in the quarter were unfavorably impacted by 1.4% due to changes in price and 0.6% due to the unfavorable impact of foreign currency exchange rates on net sales.

    Reconstructive net sales of $1,046 million increased 6.7% in the quarter over the prior year, as reported, and 7.4% in constant currency. Net sales in the quarter grew by 9.8% due to increased unit volume and changes in product mix. Net sales in the quarter were unfavorably impacted by 2.4% due to changes in price and 0.7% due to the unfavorable impact of foreign currency exchange rates on net sales.

    MedSurg net sales of $877 million increased 2.4% in the quarter over the prior year, as reported, and 2.7% in constant currency. Net sales in the quarter grew by 2.2% due to increased unit volume and changes in product mix and a favorable impact of 0.5% due to changes in price. Net sales in the quarter were unfavorably impacted by 0.3% due to the unfavorable impact of foreign currency exchange rates on net sales.

    Neurotechnology and Spine net sales of $414 million increased 9.7% in the quarter over the prior year, as reported, and 10.8% in constant currency. Net sales in the quarter grew by 13.5% due to increased unit volume and changes in product mix and 0.1% as a result of acquisitions. Net sales in the quarter were unfavorably impacted by 2.8% due to changes in price and 1.1% due to the unfavorable impact of foreign currency exchange rates on net sales.

    Earnings Analysis

    Reported net earnings in the quarter and full year include a charge of $133 million (net of taxes) related to the previously disclosed voluntary recall of the Company's Rejuvenate and ABG II modular-neck hip stems. Reported net earnings in the quarter and full year also include restructuring and related charges of $24 million (net of taxes) and $59 million (net of taxes), respectively, and acquisition and integration related charges of $9 million (net of taxes) and $37 million (net of taxes), respectively, related to acquisitions completed in 2011 and 2012. Reported net earnings in the full year include a $33 million non-tax deductible charge related to the previously disclosed OtisKnee matter. These charges reduced reported gross profit margin in the fourth quarter from 68.3% to 68.2% and reported operating income margin from 25.3% to 15.8%.

    Excluding the charges described above, adjusted net earnings(1) of $436 million and $1,560 increased 11.8% and 7.7% in the quarter and full year over the prior year, respectively. Adjusted diluted net earnings per share(2) of $1.14 and $4.07 increased 11.8% and 9.4% in the quarter and full year over the prior year, respectively.

    Net earnings of $270 million and $1,298 million decreased 32.7% and 3.5% in the quarter and full year over the prior year, respectively. Diluted net earnings per share of $0.71 and $3.39 decreased 32.4% and 1.7% in the quarter and full year over the prior year, respectively.

    In 2012 Stryker repurchased 2.1 million shares at a cost of $108 million with no share repurchase activity in the fourth quarter.

    2013 Outlook

    For the full year 2013, Stryker is projecting constant currency sales growth in a range of 3.0% to 5.5%. If foreign currency exchange rates hold near current levels, the Company anticipates net sales will be negatively impacted by approximately 0% to 1% in both the first quarter and full year of 2013.

    As previously communicated, the Company projects 2013 adjusted diluted net earnings per share(2),including the estimated $100 million (pre-tax) annual impact from the medical device excise tax, to be in a range of $4.25 to $4.40.

    With respect to 2013 quarterly sales and earnings, the Company is highlighting several factors that are expected to impact the year-over-year growth rates, including:
    1.
    the first quarter of 2013 having one to two fewer selling days in key markets compared to 2012,

    2.
    the continued negative impact in the first quarter of 2013 of the previously disclosed Japanese price reductions that took effect in April of 2012,

    3.
    the continued impact of the recall of the Neptune waste management system that occurred during the third quarter of 2012, and

    4.
    the adverse year-over-year net earnings comparison in the third quarter as a result of favorable income tax adjustments in 2012.


    As a result of these factors, the Company projects 2013 adjusted diluted net earnings per share to be distributed across the year by approximately:

    23% in the first quarter,


    24% in each of the second and third quarters, and


    29% in the fourth quarter.

    1.
    A reconciliation of reported net earnings to adjusted net earnings, a non-GAAP financial measure, and other important information, appears below.

    2.
    A reconciliation of reported diluted net earnings per share to adjusted diluted net earnings per share, a non-GAAP financial measure, and other important information, appears below.


    Conference Call on Wednesday, January 23, 2013

    As previously announced, the Company will host a conference call on Wednesday, January 23, 2013 at 4:30 p.m., Eastern Time

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