Stryker’s Earnings Call

From Seeking Alpha:

Looking at the first quarter, total company sales increased 12% on a reported basis and 10.2% on a constant currency basis. Strong, core MedSurg product growth, coupled with the acquisitions principally reflected in our new Neurotechnology segment, paced our growth. On a GAAP basis, diluted net earnings per share were $0.78, a decrease of 2.5% versus Q1 of 2010. We have noted the Neurovascular inventory step-up, other acquisition and integration-related charges totaling $46 million net of tax as a non-GAAP adjusting item in our earnings release. Excluding the charge, increases are reported U.S. GAAP diluted earnings per share of $0.78 to $0.90 per share. The U.S. GAAP diluted net earnings per share declined up 3% then becomes growth of 13% when excluding the identified non-GAAP items.

On cash flow, we continued to perform well, with cash flow from operations of $205 million and free cash flow of $150 million. Finally, in the first quarter, we repurchased 4 million shares for a total spend of $250 million. We currently have open authorizations totaling approximately $575 million.

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Turning to our outlook, our guidance as Steve noted, remains unchanged. Currency remains positive and if rates hold near current levels, we would expect second quarter sales to be favorably impacted by approximately 3% to 4% when compared to 2010. Using current rates, the full year currency impact on top line sales would be an increase in the range of 1.5% to 2.5% when compared to 2010, up from the original expectation of 0.5% to 1.5%. We are maintaining our outlook calling for net sales of 11% and net sales increase of 11% to 13% in constant currency. Excluding the impact of foreign currency as well as acquisitions, sales growth is projected to be 5% to 7% for the full year. Adjusted diluted net earnings per share are anticipated to be in the $3.65 to $3.73 range, representing an increase of 10% to 12% over 2010 adjusted diluted earnings per share.

We also now anticipate acquisition and integration-related charges associated with the recently completed Neurovascular business to reduce reported diluted net earnings per share by approximately $0.28 to $0.30 versus the previously noted $0.21 to $0.25, driven by higher costs associated with the inventory step-up, while other integration costs remain on or ahead of plan.

Posted by on April 19th, 2011 at 11:11 pm


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