Stryker 2Q Net Sales Up 6.8%, Despite MAKO Challenges: 5 Things to Know

Spinal Tech

Stryker released its financial report last week, reporting 6.8 percent growth in net sales for $2.4 billion in the quarter.

Here are five things to know about the financial report:


1. The net sales growth was due to increased unit volume and changes in the company's product mix. Acquisitions also accounted for around 2.1 percent of the company's growth. Last year Stryker acquired MAKO Surgical for $1.65 billion; this year the company has made a few other acquisitions, including Small Bone Innovations. Despite the growth, however, net sales were unfavorably impacted by 2 percent due to price changes.


Vice President of Strategy and Investor Relations addressed the MAKO Surgical acquisition in the company's conference call, saying it's been "more challenging than anticipated," according to an Medical Device and Diagnostic Industry report. However, there were six MAKO systems sold during the second quarter and Stryker still plans to launch a hip product on the MAKO platform next year, and a total knee system is in development. Stryker President and CEO Kevin Lobo is "extremely bullish" on MAKO's long-term opportunity.


2. The company's neurotechnology and spine net sales reached $430 million, a 3.8 percent increase over the same period last year. Net sales grew by 5.5 percent due to increased unit volume and changes in product mix; acquisitions only impacted the neurotechnolgy and spine business slightly with a 0.2 percent growth. The largest growth occurred in the MedSurg net sales — increasing 8.8 percent as reported to $905 million — and reconstructive net sales reached $1 billion, a 6.5 percent increase.


3. The company now projects full year organic sales to grow 5 percent to 6 percent and the adjusted diluted net earnings per share to reach between $1.12 to $1.16 and $4.75 to $4.80 for the third quarter and full year, respectively. The company does not expect the foreign currency exchanges rates to impact the third quarter or full year net sales significantly, as long as the rates hold near current levels.


In July, Stryker Director Ronda Stryker sold at least 21,000 shares of the company in various transactions. As of July 9, she owned 174,506 shares of the company, valued at $14.8 million. Winton Capital Management increased portfolio participation 33 percent — now owning more than 1 million shares worth $82.4 million — and Soros Fund Management increased portfolio participation 144 percent — now owning 1.09 million shares valued at $89.5 million.


4. In the United States, sales reached $1.5 billion for the quarter. Spine sales in the United States were down 6.1 percent, but up 9.5 percent internationally. The company's knee sales remain huge, reaching $350 million during the quarter — a 2 percent increase.


5. On July 1, Stryker opened regional headquarters in Amsterdam, which will give the company tax advantages in 2015. Medtronic recently acquired Covidien and plans to move headquarters overseas as well; these are just a few in the larger medical landscape moving their headquarters overseas. Stryker has also been named as a potential suitor for Smith & Nephew after Zimmer acquired Biomet earlier this year. Mr. Lobo addressed the move, saying consolidation in the industry was anticipated.


"The market has been pretty well disciplined thus far and we expect that [the Zimmer-Biomet transaction] will add extra discipline to that," said Mr. Lobo in the conference call.


More Articles on Orthopedic Devices:
15 Spine Devices Receive FDA 510(k) Clearance in June
Titan Spine Receives Research Award From Scoliosis Research Society
Cayenne Medical Launches SureLock All-Suture Anchor System

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers