Stryker Reports Q3 Earnings of 97 Cents Per Share

After the close, Stryker ($SYK) reported Q3 earnings of 97 cents per share. That was one penny below Wall Street’s consensus. I said in last week’s CWS Market Review that I suspected the Street might be too high.

Here are some key parts from today’s earnings report:

Earnings Analysis

Reported net earnings in the quarter include restructuring and related charges of $11 million (net of taxes), and acquisition and integration related charges of $6 million (net of taxes) related to acquisitions completed in 2011. These charges reduced reported gross profit margin from 68.2% to 68.1% and reported operating income margin from 22.9% to 21.9%.

Excluding the charges described above, adjusted net earnings(2) of $370 million increased 5.1% in the quarter over the prior year. Adjusted diluted net earnings per share(1) of $0.97 increased 6.6% in the quarter over the prior year.

Net earnings of $353 million increased 8.0% in the quarter over the prior year. Diluted net earnings per share of $0.92 increased 9.5% in the quarter over the prior year.

During the quarter, Stryker repurchased approximately 0.4 million shares at a cost of $19 million.

Outlook

The financial forecast for 2012 includes a constant currency sales increase of 4% to 5.5%. If foreign currency exchange rates hold near current levels, we anticipate net sales will be negatively impacted by approximately 0% to 1.0% in the fourth quarter of 2012 and negatively impacted by approximately 0.5% to 1.5% for the full year of 2012. Excluding the impact of acquisitions, sales growth is projected to be 2.5% to 4% in constant currency over the prior year.

The company now projects 2012 adjusted diluted net earnings per share to be in the range of $4.04 to $4.07, an increase of 9% over adjusted diluted net earnings per share of $3.72 in the prior year. The company also projects 2013 adjusted diluted net earnings per share to be in the range of $4.25 to $4.40.

Stryker had been expecting full-year earnings of $4.09 per share. Now they say it will be between $4.04 and $4.07 per share. That’s disappointing but it’s a pretty small adjustment. Stryker also gave us a 2013 forecast of $4.25 to $4.40 per share. Wall Street had been expecting $4.45 per share.

Styrker is currently down about 1.5% in the after-hours market.

Posted by on October 17th, 2012 at 4:07 pm


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