Kalamazoo, Michigan, July 25, 2019 (GLOBE NEWSWIRE) — Stryker (NYSE:SYK) reported operating results for the second quarter of 2019:
Second Quarter Highlights
- Reported net sales increased 9.9% to $3.7 billion
- Organic net sales increased 8.5%
- Reported operating income margin of 16.8%
- Adjusted operating income margin(1) expanded 20 bps to 25.9%
- Reported EPS increased 5.9% to $1.26
- Adjusted EPS(1) increased 12.5% to $1.98, exceeding the high end of guidance range
“We are pleased with our second quarter performance, highlighted by 8.5% organic sales growth,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “The durability of our growth is evidenced by continued strength across our businesses and regions, as well as our revised full-year outlook.”
Consolidated net sales of $3.7 billion increased 9.9% in the quarter and 11.5% in constant currency. Organic net sales increased 8.5% in the quarter including 9.3% from increased unit volume partially offset by 0.8% from lower prices.
Orthopaedics net sales of $1.3 billion increased 3.7% in the quarter and 5.6% in constant currency. Organic net sales increased 5.6% in the quarter including 6.9% from increased unit volume partially offset by 1.3% from lower prices.
MedSurg net sales of $1.6 billion increased 11.1% in the quarter and 12.5% in constant currency. Organic net sales increased 11.5% in the quarter including 11.6% from increased unit volume partially offset by 0.1% from lower prices.
Neurotechnology and Spine net sales of $0.8 billion increased 18.9% in the quarter and 20.8% in constant currency. Organic net sales increased 7.4% in the quarter including 8.7% from increased unit volume partially offset by 1.3% from lower prices.
Reported net earnings of $480 million increased 6.2% in the quarter. Reported net earnings per diluted share of $1.26 increased 5.9% in the quarter. Reported gross profit margin and reported operating income margin were 65.2% and 16.8% in the quarter. Adjusted gross profit margin(1) and adjusted operating income margin(1)were 65.8% and 25.9%, an improvement of 20 basis points in the quarter. Adjusted net earnings(1) of $752 million increased 12.2% in the quarter. Adjusted net earnings per diluted share(1) of $1.98 increased 12.5% in the quarter.
Based on our second quarter performance we now expect 2019 organic net sales growth to be in the range of 7.5% to 8.0% and expect adjusted net earnings per diluted share(2) to be in the range of $8.15 to $8.25. For the third quarter we expect adjusted net earnings per diluted share(2) to be in the range of $1.87 to $1.92. If foreign currency exchange rates hold near current levels, we expect net sales in the third quarter will be nominally impacted and full year will be negatively impacted by approximately 1.0%, and net earnings per diluted share will be nominally impacted in the third quarter and negatively impacted by approximately $0.10 in the full year.
(1) A reconciliation of the non-GAAP financial measures: adjusted gross profit margin, adjusted operating income and adjusted operating income margin, adjusted net earnings and adjusted net earnings per diluted share, to the most directly comparable GAAP measures: gross profit margin, operating income and operating income margin, net earnings and net earnings per diluted share, and other important information accompanies this press release.
(2) We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of restructuring-related and other charges, acquisition-related expenses and fair value adjustments to inventory and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.
Conference Call on Thursday, July 25, 2019
As previously announced, Stryker will host a conference call on Thursday, July 25, 2019 at 4:30 p.m., Eastern Time, to discuss the Company’s operating results for the quarter ended June 30, 2019 and provide an operational update.
To participate in the conference call dial (877) 702-4565 (domestic) or (647) 689-5532 (international) and be prepared to provide conference ID number 5290408 to the operator.
A simultaneous webcast of the call will be accessible via the Company’s website at www.stryker.com. The call will be archived on the Investor Relations page of this site.
A recording of the call will also be available from 8:00 p.m., Eastern Time, on Thursday, July 25, 2019, until 11:59 p.m., Eastern Time, on Thursday, August 1, 2019. To hear this recording, you may dial (800) 585-8367 (domestic) or (416) 621-4642 (international) and enter conference ID number 5290408.
Caution Concerning Forward-Looking Statements
This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities laws that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; potential supply disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to recall-related matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; costs to comply with medical device regulations; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Stryker is one of the world’s leading medical technology companies and, together with our customers, we are driven to make healthcare better. The Company offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes. More information is available at www.stryker.com.
For investor inquiries please contact:
Katherine A. Owen, Vice President, Strategy & Investor Relations at 269-385-2600 or [email protected]
For media inquiries please contact:
Yin Becker, Vice President, Communications, Public Affairs and Corporate Marketing at 269-385-2600 or [email protected]