In short
Stryker Corporation has announced preliminary net sales for the fourth quarter of $2.3 billion, and full year 2012 $8.7 billion. These represent increases of 5.5% and 4.2%, respectively. Excluding the impact of foreign currency and acquisitions, preliminary net sales increased 6.1% in the fourth quarter and 4.2% for the year ended December 31, 2012.
Background
Stryker’s preliminary Fourth Quarter highlights include net sales growth of 5.5% to $2.3 billion. The company reported growth in all three business units as follows:
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
Preliminary Full Year highlights include net sales growth of 4.2% to $8.7 billion with again all business units chipping in as follows:
Reconstructive increased 3.1% as reported, 4.4% constant currency
MedSurg increased 3.3% as reported, 4.2% constant currency
Neurotechnology and Spine increased 9.2% as reported, 10.5% constant currency
Stryker now projects 2012 adjusted diluted net earnings per share to be in the range of $4.05 to $4.07, an increase of 8.9% to 9.4% over adjusted diluted net earnings per share of $3.72 in 2011.
2013?
For 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.
The Company is highlighting several factors that are expected to impact the year-over-year growth rates, including:
- the first quarter of 2013 having one to two fewer selling days in key markets compared to 2012,
- the continued negative impact in the first quarter of 2013 of the previously disclosed Japanese price reductions that took effect in April of 2012,
- the continued impact of the recall of the Neptune waste management system that occurred during the third quarter of 2012, and
- the adverse year-over-year net earnings comparison in the third quarter as a result of favourable income tax adjustments in 2012.
Company comments
“With a solid performance in the fourth quarter, we delivered on our revised sales and earnings targets. This reflects the commitment of our global teams and strength of our diverse sales footprint,” commented Kevin A. Lobo, President and Chief Executive Officer. “We remain committed to driving shareholder value and optimizing our balance sheet as reflected in the recently announced 25% increase in our quarterly dividend as well as an increase in our share repurchase authorization to $1 billion.”
International initiatives
So what’s the plan for Stryker moving forward? Well, according to Kevin Lobo, speaking at the recent JP Morgan Healthcare conference, as reported by Qmed, the key to future revenue growth lies in the international markets.
The company is planning to overhaul its European and emerging-markets businesses, Europe in particular representing a key plank in this global initiative. The company has already made several significant changes in its management and structure overseas, but recognises that it could take several quarters for changes to be reflected in the company’s finances.
Emerging markets currently represent six percent of Stryker’s sales and while the company has an existing footprint and has seen 20 percent growth,it’s pretty clear that it believes a larger footprint would enhance sales.
In ending remarks, Lobo stated, “Globalization’s an enormous opportunity for Stryker, we clearly have room to grow outside the U.S.” He continued, “The U.S. is still representative of 65% of our total sales. That is a ratio that hasn’t changed in about 10 years.”
Source: Stryker Corporation, Inc., Qmed.com
