Stryker Corp. won’t achieve a ninth straight year of double-digit sales growth this year, the company’s chief executive officer told Stryker shareholders Wednesday.
Stephen P. MacMillan said hospitals have cut spending, patients have delayed surgeries and the U.S. dollar has strengthened compared to foreign currencies. Those three trends are combining to slow sales growth for the Kalamazoo-based medical-technology company.
In 2008, Stryker was one of only 14 Fortune 500 companies to achieve eight straight years of double-digit revenue growth. It had revenue of $6.7 billion in 2008, which was up 12 percent over 2007.
“I don’t think it’s going to be a ninth straight year,” MacMillan said during the company’s annual meeting, held at the Radisson Plaza Hotel & Suites. “With the current economy, with the dollar doing what it’s doing — eight’s been great. But we will get back to double-digit revenue growth.”
During the meeting, Chairman John W. Brown conducted the official business of electing Stryker’s board of directors, which included a new director, Howard L. Lance, CEO of Harris Corp.
Despite the economic troubles, MacMillan said, Stryker is well-positioned to handle weakness in the market because it is sitting on $2.2 billion in cash, and it has no long-term debt.
“It’s companies with strong balance sheets that will thrive in the years ahead. And particularly in this turbulent time”, he said. “When you look at the companies going down and the companies that are struggling, it’s because so many of them did leverage themselves.”
A year ago at this time, Stryker stock was trading near its 52-week high of about $69, and the annual meeting was decidedly more upbeat. Since then, the stock price has fallen 40 percent, the company failed to meet its long-running goal of growing annual profit by at least 20 percent on a per-share basis, and its profit in the first quarter this year declined by 3 percent.
Yet shareholders probably were pleased to hear MacMillan say he expected Stryker would this year again increase its annual dividend, which was 40 cents per share last year.
He said there are a lot of companies that have cut their dividend in the last four or five months, “because their cash flow was going down.”
He said they include some great companies. “But, again, our financial strength is allowing us to keep that trend going up”