Earnings

Return to Article

Stryker Q1 Profit Dips 3.2 Percent On Economy

The Associated Press

KALAMAZOO, Mich. (AP) — Surgical product maker Stryker Corp. on Monday reported a 3.2 percent drop in first-quarter profit, citing the global recession and effects of the strong dollar, and cut its financial forecast for the rest of 2009.

The maker of orthopedic implants, surgical equipment and imaging systems said net income amounted to $281.1 million, or 71 cents per share. In the first three months of 2008, Stryker reported net income of $290.5 million, or 70 cents per share.

Revenue totaled $1.60 billion, down 2 percent from $1.63 billion in the first quarter of 2008.

Analysts surveyed by Thomson Reuters on average expected earnings per share of 71 cents, but slightly higher revenue of $1.63 billion.

The company said it was reducing its profit forecast for 2009 due to "continued weaker demand" for certain medical surgical equipment products, plus slowing elective surgery procedures for some orthopedic implant products.

Kalamazoo, Mich.-based Stryker said it now expects 2009 earnings per share to range from $2.90 to $3.10. That's down from its early January forecast of $3.12 to $3.22.

And if exchange rates hold near their March 31 levels, Stryker expects that to cut sales by about 5.5 percent to 6 percent in the second quarter and about 3.5 percent to 4.5 percent for all of 2009.

"The unprecedented global economic slowdown clearly impacted our business, yet our diverse set of businesses still delivered underlying sales growth in this very challenging period," Chief Executive Stephen MacMillan said in a statement.

Stryker said domestic sales increased 0.9 percent due to higher shipments of orthopedic implants, which were partly offset by lower shipments of medical and surgical equipment. Meanwhile, international sales fell 7 percent as unfavorable exchange rates due to the strong dollar pulled down foreign revenue by $87 million.

The company said total revenue would have been up by 3.3 percent over the year-ago quarter, if not for the effects of the strong dollar.