Rejuvenate hip recall hits Stryker's Q2 profits

July 19, 2013 by Brad Perriello

Stryker Corp.'s 2nd-quarter profits plunge nearly 35% on costs related to the recall of its Rejuvenate hip implant, as it misses Wall Street's earnings expectations and lowers its 2013 outlook.

Rejuvenate, ABG II hip recalls hit Stryker's Q2 profits

Stryker (NYSE:SYK) said an unexpected, $170 million hit related to its recalled Rejuvenate hip implant pushed its 2nd-quarter profits down nearly 35% and lowered its earnings outlook for the rest of the year.

The Kalamazoo, Mich.-based medical device company posted profits of $213 million, or 56¢ per share, on sales of $2.21 billion during the 3 months ended June 30, for sales growth of 5.0% but a bottom-line slide of 34.5%.

Adjusted to exclude 1-time items like the recall costs, earnings per share were $1 even, coming in 3¢ under Wall Street's forecast.

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New CFO William Jellison said negative foreign exchange rates hit EPS for 4¢ and the medical device tax cost Stryker another 3¢.