Stryker Boosts Expected 2010 Results, Provides 2011 Outlook
Kalamazoo-based Stryker Corp. (NYSE: SYK) said Monday sales were $1.995 billion for the fourth quarter of 2010, an 8.8 percent increase over $1.834 billion for the fourth quarter of 2009, and were $7.32 billion for the year ended Dec. 31, an 8.9 percent increase over sales of $6.723 million for the year ended Dec. 31, 2009.
Stryker expects 2010 diluted net earnings per share to be in the range of $3.17 to $3.19 compared to diluted net earnings per share of $2.77 in 2009. During the fourth quarter of 2010, the Company will record a charge of approximately $125 million ($77 million net of income taxes) to reflect the anticipated loss on the previously announced sale of OP-1 assets used in orthopaedic bone applications.
Excluding the impact of the 2010 OP-1 assets charge and other previously reported adjusting items, adjusted diluted net earnings per share for 2010 are expected to be in the range of $3.31 to $3.33, above the previously communicated $3.27 to $3.30 range. This will represent an increase of 12.2 to 12.9 percent over adjusted diluted net earnings per share of $2.95 in 2009.
During the fourth quarter, Stryker repurchased 6.1 million shares at a cost of $314 million bringing total 2010 share repurchases to 8.3 million shares at a cost of $426 million.
“Despite ongoing economic uncertainty and a slowdown in elective surgeries, we delivered sales growth at the high end of the range established at the start of 2010. Additionally, we achieved earnings growth above the high end of the stated range while making significant investments in our quality and compliance systems, as well as sales, marketing and R&D,” commented Stephen P. MacMillan, Chairman, President and CEO. “We took a number of important steps to reshape our company and enhance our competitive position by executing on several strategic acquisitions that are strengthening our core product offerings while also allowing us to further diversify our sales footprint in some of the highest growth segments in medical technology. And with the sale of the OP-1 product family for use in orthopaedic bone applications, we refocused our biologic R&D activities. Finally, we utilized our exceptional cash flow generation to further enhance shareholder return with a 20 percent increase in our quarterly dividend coupled with ongoing share repurchases.”
Domestic sales were $1.286 billion for the fourth quarter and $4.793 billion for the year ended Dec. 31, 2010, increases of 11 percent in both the quarter and year. International sales were $710 million for the fourth quarter and were $2.527 billion for the year, increases of 5 and 5.1 percent respectively.
Worldwide sales of Orthopaedic Implants were $1.166 billion for the fourth quarter and $4.308 billion for the year, increases of 4.5 and 4.6 percent, respectively. Worldwide sales of MedSurg Equipment were $829 million for the fourth quarter representing an increase of 15.3 percent and were $3.012 billion for the year, representing an increase of 15.7 percent.
The company is predicting 5 to 7 percent sales growth in 2011, with net earnings per share of $3.65 to $3.73, an increase of 10 to 13 percent over expected adjusted diluted net earnings per share of $3.31 to $3.33 in 2010.
Stryker also announced that it will host a conference call on Tuesday, Jan. 25 at 4:30 p.m. Eastern Time to discuss its results for the quarter and year ended Dec. 31 and provide an operational update. Final operating results for the quarter and year will be released at 4 p.m. that day.
To participate in the conference call dial (800) 510-0219 (domestic) or (617) 614-3451 (international) and enter the participant passcode 75423588. A simultaneous Webcast of the call will be accessible at www.stryker.com. The call will be archived on this site for 90 days. A recording of the call will also be available from 8:30 p.m. Eastern time Jan. 25 to 11:59 p.m. Eastern time Feb. 1. To hear this recording you may dial (888) 286-8010 (domestic) or (617) 801-6888 (international) and enter the passcode 88981346.