Stryker Corp.’s 2020 Sales Slip 3.6 Percent

Stryker Corp. appears to be (financially) surviving the COVID-19 pandemic rather well.

Despite social distancing restrictions, business closures, and elective surgery postponements, the company’s total sales increased 3.2 percent to $4.3 billion in the final quarter of 2020 (2 percent in constant currency). Growth also was recorded in its three business units, with Orthopaedics leading the charge (revenue swelled 4 percent to $1.5 billion). Neurotechnology and Spine net sales jumped 3.5 percent to $900 million (2.1 percent in constant currency); organic net sales rose 2.1 percent in the quarter including 4 percent from increased unit volume partially offset by 1.9 percent from lower prices. For the three months ending Dec. 31, 2020, MedSurg proceeds increased 2.3 percent to $1.9 billion (1.5 percent in constant currency); organic net sales increased 1.3 percent in the quarter including 1.2 percent from increased unit volume and 0.1 percent from higher prices.
 
“In spite of COVID-19 outbreaks that intensified through the quarter, our teams showed good resilience and delivered a solid quarter of financial results,” said Kevin Lobo, Stryker’s chairman and CEO. “As we saw with prior pandemic spikes, the impacts were strongest in the businesses linked to deferrable procedures, but as evidenced by our guidance for 2021, we are optimistic about our prospects for the future. The Wright Medical integration is off to a strong start and we continue to advance innovation across the company. On behalf of the Stryker leadership team, I would like to offer my thanks to our employees and to the caregivers and first responders for their efforts in continuing to deal with this health crisis.”
 
Consolidated full-year net sales fell 3.6 percent to $14.4 billion (3.6 percent in constant currency). Organic net sales decreased 4.8 percent in the quarter and full year including 4.1 percent from decreased unit volume and 0.7 percent from lower prices. Orthopaedics revenue tanked 5.6 percent to $5 billion (5.7 percent in constant currency); organic net sales decreased 5.8 percent and 8.1 percent in the quarter and full year including 4.6 percent and 6.6 percent from decreased unit volume and 1.5 percent from lower prices.
 
MedSurg revenue slid 1.4 percent to $6.4 billion decreased (1.3 percent in constant currency). Organic net sales decreased 1.8 percent in the full year including 1.8 percent from decreased unit volume and a nominal impact from changes in pricing.
 
Neurotechnology and Spine net sales dropped 4.7 percent to $3 billion (4.9 percent in constant currency). Organic net sales decreased 5.7 percent in the full year including 4.9 percent from decreased unit volume and 0.8 percent from lower prices.
 
Reported net earnings of $568 million and $1.6 billion decreased 21.7 percent and 23.2 percent in the quarter and full year. Reported net earnings per diluted share of $1.49 and $4.20 decreased 21.6 percent and 23.4 percent in the quarter and full year. Reported gross profit margin and reported operating income margin were 63.7 percent and 17.6 percent in the quarter and 63.1 percent and 15.5 percent in the full year. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, restructuring-related and other charges, costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin was 65.1 percent and 63.8 percent in the quarter and full year, and adjusted operating income margin was 29.2 percent for the quarter, an improvement of 90 basis points, and 24.4 percent for the full year, a decline of 190 basis points. Adjusted net earnings of $1.1 billion and $2.8 billion increased 13 percent in the quarter and decreased 9.9 percent in the full year. Adjusted net earnings per diluted share of $2.81 and $7.43 increased 12.9 percent in the quarter and decreased 10 percent in the full year.