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| Stryker CEO Kevin Lobo |
Metal hip implant recalls continued to drag down Stryker's ($SYK) net earnings during the 2013 third quarter. While the number hit $103 million, the results reflect a drop of 70.8% over the same period a year ago, in large part because of costs relating to the company's Rejuvenate and ABG II recalls.
To date, Stryker said it has recorded $700 million in charges relating to its all-metal hip recall effort.
A charge of $313 million during the quarter mostly involved hip recall expenses, as well as costs relating to the recall of the company's Neptune Waste Management System. Acquisition-related expenses took their toll, including costs relating to Stryker's anticipated $1.7 billion buyout of robot assisted surgery outfit Mako ($MAKO). (Stryker's offer for Mako, announced in late September, represents a sizeable premium--nearly twice Mako's market cap.)
Without the metal hip recall and other one-time expenses, Stryker results for the quarter generally landed on the positive side.
Stryker reported $2.15 billion in net sales during the quarter, a 4.8% hike over the $2 billion generated during the 2012 third quarter. The Michigan company generated strong sales gains in its reconstructive, neurotechnology and spine divisions. Even Stryker's MedSurg arm grew sales 1.5% compared to the 2012 third quarter.
Stryker President and CEO Kevin Lobo said the results "not only represent gradual improvement in our key markets but also underscore our commitment to delivering above market growth." Lobo added that the company remains on track with its full-year adjusted earnings per share guidance of $4.20 to $4.26. Overall, Stryker predicts full-year organic sales growth of between 4.5% and 5.5%.
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