Despite a big uptick in surgical equipment sales, Stryker Corp. (NYSE:SYK) narrowly missed second-quarter revenue forecasts, but still managed to meet analysts’ estimates for a $319 million profit.
Global net sales rose 7.6 percent to $1.76 billion, a 7.6 percent increase over the three months ended June 30, 2009. Much of the jump in revenues resulted from gains for Stryker’s MedSurg business, which climbed $101.5 million, or 16.4 percent, to $721.2 million for the quarter. Patient handling and emergency medical equipment showed the strongest growth within that segment, rising 22 percent year-over-year. Surgical navigation systems and other operating room tools also continued their sales rebound, rising 12 percent from depressed year-ago levels.
By comparison, Stryker’s orthopedic segment languished a bit, adding only $22.2 million, or 2.2 percent, to reach nearly $1.1 billion during the period. Sales of trauma-related implants, especially domestically, were a bright spot within the segment, gaining 7 percent and helping offset flat sales of knee and spinal implants.
Analysts, on average, had been expecting Stryker to generate $1.78 billion in overall sales. The near-miss spurred a 3.5 percent selloff in after-hours trading, with shares falling as much as $1.79 a share to $49.50, down from a $51.29-a-share close June 20.
Stryker’s second-quarter sales performance also slightly trailed the $1.8 billion reported during the January-to-March period. Favorable foreign currency exchange rates added about $11 million to the second-quarter results, significantly less than the $58 million a stronger dollar contributed to the company’s first-quarter sales totals.
Stryker executives stood by their 2010 outlook for a 5 percent to 8 percent jump in sales — or between $7.06 billion to $7.26 billion on a constant currency basis — on higher shipments of orthepedic and med-surg equipment from 2009 levels. Those forecasts assume a 1 percent to 2 percent negative impact from exchange rates during the current quarter and unfavorable currency effects trimming as much as a 1 percent from fourth-quarter sales.
The company also forecast net earnings of between $3.20 to $3.30 a share, up from $2.95 EPS in 2009. Its $319 million profit during the three months ended June 30 translates into an 80-cent profit for the quarter, up 9.5 percent from last year and matching Wall Street predictions.