[This was a good quarter, but there was nothing spectacular about it. Orthopedic implants, which account for 60% of sales, continue to benefit from The Global Demographic Tailwind (#board-15787) as people get older, richer, and fatter. The MedSurg division, which accounts for 40% of sales and suffered from belt-tightening by hospitals during the recession, is back in a growth mode.
I think SYK is a good core healthcare holding that has more than a modicum of buyout vig; it is one of my 5% picks in the 2010 SI charity contest. At the midpoint of SYK’s 2010 EPS guidance of $3.25, the current share price represents a forward P/E ratio of 18, which is neither dirt cheap nor unduly expensive.]
›Stryker Reports 12% Sales Growth, 14% Net Earnings Growth for Quarter Ended March 31, 2010
April 20, 2010, 4:00 pm EDT
KALAMAZOO, Mich., April 20 /PRNewswire-FirstCall/ -- Stryker Corporation (NYSE:SYK) reported operating results for the quarter ended March 31, 2010 as follows:
• Net sales increased 8.7% on a constant currency basis (12.4% as reported) to $1,799 million
• Orthopaedic Implants sales increased 6.4% on a constant currency basis (10.7% as reported)
• MedSurg Equipment sales increased 12.2% on a constant currency basis[9.6% on a constant currency basis excluding a large one-time transaction as mentioned below] (15.0% as reported)
• Net earnings increased 14.4% from $281 million to $322 million
• Diluted net earnings per share increased 12.7% from $0.71 to $0.80
"Our first quarter results demonstrate that the investments we have made are resulting in improving sales and earnings momentum for both our Orthopaedic Implant and MedSurg businesses. Although we continue to navigate through a challenging macro environment, it's clear that our diverse product offering and global presence afford considerable competitive advantages," commented Stephen P. MacMillan, Chairman, President and Chief Executive Officer.
Net sales increased 12.4% to $1,799 million for the first quarter of 2010. On a constant currency basis, net sales increased 8.7% in the quarter.
Net earnings for the first quarter of 2010 were $322 million, representing a 14.4% increase over net earnings of $281 million for the first quarter of 2009. Diluted net earnings per share for the first quarter of 2010 increased 12.7% to $0.80 compared to $0.71 for the first quarter of 2009.
Sales Analysis
Domestic sales were $1,173 million for the first quarter of 2010, representing an increase of 12.6%, as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment.
International sales were $626 million for the first quarter of 2010, representing an increase of 11.9%. The impact of foreign currency comparisons to the dollar value of international sales was favorable by $58 million in the first quarter of 2010. On a constant currency basis, international sales increased 1.5% in the first quarter of 2010, as a result of higher shipments of Orthopaedic Implants partially offset by lower shipments of MedSurg Equipment.
Worldwide sales of Orthopaedic Implants were $1,077 million for the first quarter of 2010, representing an increase of 10.7%. On a constant currency basis, sales of Orthopaedic Implants increased 6.4% in the first quarter of 2010, based on higher shipments of hips, knees, trauma and spinal implant systems.
Worldwide sales of MedSurg Equipment were $722 million for the first quarter of 2010, representing an increase of 15.0%. On a constant currency basis, sales of MedSurg Equipment increased 12.2% in the first quarter of 2010, as higher shipments of endoscopic and communications systems and patient handling and emergency medical equipment as well as sales growth through acquisitions were partially offset by lower sales of surgical equipment and surgical navigation systems. Sales of MedSurg Equipment were also positively impacted by 2.6% from a one-time shipment of patient handling equipment. Excluding this shipment, worldwide sales of MedSurg Equipment increased 9.6% on a constant currency basis in the first quarter.
2010 Outlook
The financial forecast for 2010 includes a constant currency net sales increase of 5% to 8% as a result of growth in shipments of Orthopaedic Implants and MedSurg Equipment. If foreign currency exchange rates hold near current levels, the Company anticipates net sales will be favorably impacted by approximately 1% to 2% in the second quarter of 2010 and by approximately 0.5% to 1.5% for the full year of 2010. The Company projects that diluted net earnings per share for 2010 will be in the range of $3.20 to $3.30, an increase of 8% to 12% over adjusted diluted net earnings per share of $2.95 in 2009.
Conference Call
As previously announced the Company will host a conference call for financial analysts at 4:30 p.m., Eastern Time, today to discuss the Company's operating results for the quarter ended March 31, 2010 and provide an operational update. To participate in the conference call dial 866-713-8562 (domestic) or 617-597-5310 (international) and enter the participant passcode 71400353. A simultaneous webcast of the call will be accessible via the Company's website 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, on Tuesday, April 20, 2010, until 8:30 p.m. on Tuesday, April 27, 2010. To hear this recording, dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter the passcode 52436405.‹
Market Data 
Markets 
AI
