Dollar woes add up to a modest Q3 gain for Stryker Corp.

October 20, 2009 by MassDevice staff

The Kalamazoo, Mich.-based orthopedic and surgical device maker reports slight upticks in third-quarter sales and earnings and downgrades its full-year guidance.

A slumping dollar was just enough to keep Stryker Corp. sales from completely flat-lining during the third quarter.

The decline in the value of the U.S. dollar against other currencies worked to prop up otherwise flat sales for the orthopedic and surgical equipment manufacturer during the three months ended Sept. 30, resulting in a 1.2 percent quarterly increase in sales compared with year-ago results.

Stryker's bottom line also benefited from a soft dollar, turning a modest $3 million gain in third-quarter net income into a 1.3 percent jump in profits.

On a reported basis, Kalamazoo, Mich.-based Stryker posted adjusted Q3 net earnings of $277 million, or 69 cents per share, compared with a $274-million profit, or 66 cents per share, during the third quarter of 2008.

Reported revenues were $1.7 billion, unchanged from last year.

Company executives said they were generally pleased with their "solid results in a challenging environment," but added they try to hold themselves and the company to a higher standard.

"Nobody at Stryker is satisfied with parity," CEO Stephen MacMillan told analysts during a conference call discussing the third-quarter results.

According to the company, sales of orthopedic implants rose 5.5 percent on reported basis, just topping $1 billion and helping to offset a 7.7 percent decline in medical and surgical equipment sales. The bottom line was also aided by cuts in sales and administration expenses and research and development costs.

Adjusted earnings also included $48 million in after-tax charges for restructuring costs.

Stryker also said it's reining in its revenue and earnings guidance for the whole of 2009 and now expects earnings per share of $2.90-$3.00, down from its previous forecast of $2.90-$3.10.