Stryker 2015 Sales Rise Nearly 3 Percent

    Talk about strong showings.

Stryker Corp. literally saved the best for last in 2015, posting a 3.7 percent sales increase in the fourth quarter (ended Dec. 31) — its best three-month period of the entire year. Net sales swelled to $2.7 billion, with Orthopedic revenue climbing 3.3 percent (7.1 percent in constant currency), MedSurg sales rising 3 percent (5.6 percent in constant currency), and Neurotechnology & Spine proceeds increasing 6.5 percent (9.9 percent in constant currency). Reported net earnings per diluted share (EPS) skyrocketed 106 percent to $1.38, while adjusted net EPS jumped 8.3 percent to $1.56.

“With 2015 organic sales growth of 6.1 percent, bolstered by a strong fourth quarter increase of 6.4 percent, our top line results came in above our initial guidance,” said Kevin A. Lobo, chairman/CEO. “This performance reflects the strength of our diversified revenue model, a commitment to innovation and the competitive advantage of our sales and marketing organizations. Our full-year adjusted diluted EPS also exceeded our initial expectation, underscoring our commitment to delivering sales growth at the high end of med tech and leveraged earnings gains. With these results and the current momentum across our businesses, we feel well positioned heading into 2016.”

Full-year sales grew 2.8 percent (7 percent in constant currency) to $9.9 billiion and gross profit increased 3.9 percent to $6.6 billion.

U.S. sales rose 8.5 percent last year to $7.1 billion, fueled by growth across all reporting segments. Orthopedic, MedSurg, and Neurotechnology & Spine grew 1.7 percent, 3 percent and 5 percent, respectively. International sales fell 9.2 percent (up 3.7 percent at constant currency) on a year-over-year basis to $2.8 billion. Geographically, weaknesses in both the company’s Chinese and Latin American businesses impacted Orthopedic sales.

Orthopedics net sales of $4.2 billion increased 1.7 percent as reported and 6.7 percent in constant currency, as foreign currency exchange rates negatively impacted revenue by  5 percent. Acquisitions had no impact on net sales in the quarter and 0.5 percent in the full year. Excluding the impact of acquisitions, 2015 net sales increased 6.1 percent in constant currency including 8.6 percent from increased unit volumes partially offset by 2.4 percent in lower prices.

MedSurg net sales of $3.9 billion increased 3 percent and 6.2 percent in constant currency last year, though foreign currency exchange rates negatively impacted revenue 3.2 percent. Excluding the impact of acquisitions, net sales increased 4.5 percent in constant currency including 4.8 percent from increased unit volumes partially offset by 0.3 percent in lower prices.

Neurotechnology and Spine net sales of $1.8 billion increased 5 percent and 9.5 percent in constant currency in 2015, with foreign currency exchange rates negatively impacting sales by 4.5 percent. Acquisitions impacted net sales 0.1 percent in the full year. Excluding the impact of acquisitions, net sales increased 9.4 percent in constant currency including 11.6 percent from increased unit volumes partially offset by 2.3 percent in lower prices.

Reported net earnings of $1.4 billion increased 179.4 percent in full year. Reported net earnings per diluted share of $3.78 increased 182.1 perent. Reported net earnings includes charges for the Rejuvenate and ABG II recall, amortization of intangible assets, restructuring-related activities and acquisition and integration related activities. Excluding the impact of those charges, reported gross profit margin increased in the quarter from 67 percent to 67.1 percent and for the full year from 66.4 percent to 66.5 percent. Reported operating income margin increased in the quarter from 23.9 percent to 27.4 percent and for the full year from 18.7 percent to 24.9 percent.

Adjusted net earnings of $591 million and $1.9 billion increased 7.1 percent and 7.7 percent, in the quarter and full year. Adjusted net earnings per diluted share of $1.56 and $5.12 increased 8.3 percent and 8.2 percent in the quarter and full year.

Stryker executives predict 2016 constant currency sales growth to range between 5 percent and 6 percent, and adjusted net earnings per diluted share to fall between $1.17-$1.22 for the first quarter and $5.50-$5.70 for the full year. If foreign currency exchange rates hold near current levels, net sales in the first quarter and full year could be negatively impacted by roughly 1.1 percent and 1 percent, and adjusted net earnings per diluted share to be negatively impacted by approximately $0.02-$0.03 in Q1 and $0.12-$0.13 in the full year.