Garden Actually Rather Rosy At Stryker Following Strong Sales And Restructuring Measures

“…we believe we are well positioned to deliver solid sales and earnings growth in 2012 through a combination of leveraging our acquisitions while also continuing to deliver new products stemming from internal innovation.”

Abstract

Stryker Corporation has released preliminary details of its sales and anticipated financial results for fourth quarter 2011 showing an 11% revenue increase over the equivalent period a year ago.

Revenue in detail

Preliminary net sales for the quarter were $2.2 billion for the period, compared with $2.0 billion a year ago. Neurotechnology and Spine were the stars of the show with a sales increase of 46.8%, MedSurg increasing 11.1% and Reconstructive increasing 0.7%.

Net sales were $8.3 billion for the year ended December 31, 2011, representing a 13.5% increase over net sales of $7.3 billion for the year ended December 31, 2010.

On a constant currency basis, net sales increased 11.1% for the year, within the previously communicated 11% to 12% constant currency sales growth range, with Neurotechnology and Spine increasing 46.4%, MedSurg increasing 11.2% and Reconstructive increasing 1.5%. Excluding the impact of foreign currency and acquisitions, net sales increased 4.0% in the fourth quarter and 4.4% for the year ended December 31, 2011.

Restructuring costs assumed in Q4 2011

Stryker announced workforce reductions and other restructuring activities in November 2011 and charges amounting to $76 million ($60 million net of taxes) relating to those reductions are expected to be assumed during the Q4 figures. In addition, during the fourth quarter of 2011, the Company recorded a benefit related to a favorable settlement with the United States Internal Revenue Service amounting to approximately $99 million net of taxes.

The net effect is that the company expects to be projecting a 12% increase in earnings per share over prior year.

Company comments

“Our 2011 financial results underscore the strength of our unique sales footprint, which reflects balanced diversification both geographically and across a range of key segments of medical technology. As a result, we delivered solid top line growth despite the continued challenges presented by the global economy, as we leveraged a series of strategic acquisitions along with new products reflecting our ongoing commitment to internal innovation,” commented Stephen P. MacMillan, Chairman, President and Chief Executive Officer. “Additionally, we have further optimized our capital structure with a 20% increase in our 2011 quarterly dividend coupled with the repurchase of $622 million of shares. These actions are aimed at maximizing shareholder returns and position us well to realize our 2012 sales and earnings commitments. Longer term, our focus on driving efficiencies, investing in innovation and continued dedication to our quality and compliance systems underscore our conviction in our ability to deliver double-digit earnings growth.”

2012 Outlook

Excluding the expected impact of foreign currency and acquisitions, projected sales growth is 2% to 5% for 2012.

The Company projects 2012 adjusted diluted net earnings per share to grow at double-digit levels over expected adjusted diluted net earnings in 2011. In 2012, the Company anticipates previously announced restructuring and related charges and acquisition and integration-related charges to reduce reported diluted net earnings per share by approximately $0.22.

“As we build on the accomplishments of 2011, we believe we are well positioned to deliver solid sales and earnings growth in 2012 through a combination of leveraging our acquisitions while also continuing to deliver new products stemming from internal innovation,” commented Stephen P. MacMillan, Chairman, President and Chief Executive Officer.

Source: Stryker Corp