Stryker Corporation (Stryker), an orthopedic devices company, has reported net sales of $1.60 billion for the first quarter of 2009, down 2%, compared with net sales of $1.63 billion in the year-ago quarter. It has reported net earnings of $281 million, or $0.71 per diluted share, for the first quarter of 2009, down 3.2%, compared with the net earnings of $291 million, or $0.70 per diluted share, in the year-ago quarter.
“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 as six of our eight key product franchises delivered mid-single to low double-digit constant currency revenue growth,” commented spokesman of Stryker.
Domestic sales were $1,042 million for the first quarter of 2009, up of 0.9%, as a result of higher shipments of Orthopaedic Implants partially offset by lower shipments of MedSurg Equipment.
International sales were $559 million for the first quarter of 2009, representing a down of 7.0%. The impact of foreign currency comparisons to the dollar value of international sales was unfavorable by $87 million in the first quarter of 2009. On a constant currency basis, international sales increased 7.4% in the first quarter of 2009, as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment.
Worldwide sales of Orthopaedic Implants were $973 million for the first quarter of 2009, representing an increase of 0.2%. On a constant currency basis, sales of Orthopaedic Implants increased 6.2% in the first quarter of 2009, based on higher shipments of reconstructive, trauma, spinal and craniomaxillofacial implant systems.
Worldwide sales of MedSurg Equipment were $628 million for the first quarter of 2009, representing a down of 5.3%. On a constant currency basis, sales of MedSurg Equipment decreased 1.0% in the first quarter of 2009, as higher shipments of surgical equipment and surgical navigation systems were offset by lower sales of endoscopic, communications and digital imaging systems and patient handling and emergency medical equipment.
The company’s effective income tax rate for the first quarter of 2009 was 27.3%, as against to effective income tax rates for the first quarter of 2008 and year ended December 31, 2008 of 28.1% and 27.4%, respectively.
Guidance for 2009
As a result of the continued weaker demand for certain MedSurg Equipment products as well as consideration of slowing elective procedures for certain Orthopaedic Implant products, the Company is reducing its guidance for 2009.
For 2009, Stryker now expects diluted net earnings per share for 2009 will be in the range of $2.90 to $3.10, an increase of 2% to 10% over adjusted diluted net earnings per share of $2.83 in 2008. The financial forecast for 2009 anticipates a constant currency net sales increase in the range of 2% to 5%. If foreign currency exchange rates hold near March 31, 2009 levels, the Company anticipates an unfavorable impact on net sales of about 5.5% to 6% in the second quarter of 2009 and an unfavorable impact on net sales of about 3.5% to 4.5% for the full year of 2009.