Stryker (NYSE:SYK) reported operating results for the first quarter
of 2020:
The response to the COVID-19 pandemic has
included unprecedented measures to slow the spread of the virus
taken by local governments and health care authorities globally,
including the deferral of elective medical procedures and social
contact restrictions, which have had a significant negative impact
on Stryker’s operations and financial results.
First Quarter Results
- Reported net sales increased 2.0% to $3.6
billion
- Organic net sales increased 2.4%
- Reported operating income margin of 17.7%
- Adjusted operating income margin(1) contracted 110 bps
to 24.0%
- Reported EPS increased 19.3% to $1.30
- Adjusted EPS(1) decreased 2.1% to $1.84
|
First Quarter Net Sales Growth Overview |
|
Reported |
|
Foreign Currency Exchange |
|
Constant Currency |
|
Acquisitions |
|
Organic |
Orthopaedics |
(2.1 |
)% |
|
(0.9 |
)% |
|
(1.2 |
)% |
|
— |
% |
|
(1.2 |
)% |
MedSurg |
6.2 |
|
|
(0.8 |
) |
|
7.0 |
|
|
0.7 |
|
|
6.3 |
|
Neurotechnology and Spine |
0.7 |
|
|
(0.8 |
) |
|
1.5 |
|
|
1.2 |
|
|
0.3 |
|
Total |
2.0 |
% |
|
(0.9 |
)% |
|
2.9 |
% |
|
0.5 |
% |
|
2.4 |
% |
"Our first quarter organic sales growth of 2.4%
reflects strong momentum through much of the quarter before
experiencing a significant negative impact from the COVID-19
pandemic," said Kevin Lobo, Chairman and Chief Executive Officer.
"We have taken a number of steps designed to ensure the safety of
our employees and customers while continuing to meet the needs of
hospitals and caregivers providing essential services. While the
fluidity of the current environment makes it difficult to predict
our financial performance for the remainder of 2020, given the
strength of our balance sheet and cost containment efforts
underway, we believe we are well positioned to manage through this
unprecedented situation. And as patients who have deferred surgical
procedures begin to return over the coming weeks and months, we
will work with our customers to help meet the expected demand. On
behalf of the Stryker leadership team, I would like to offer my
thanks to our thousands of employees around the globe and to the
caregivers and first responders for their tremendous efforts in
dealing with this health crisis."
Sales Analysis
Consolidated net sales were significantly
negatively impacted by the global response to the COVID-19
pandemic, resulting in lower than previously expected unit volume
growth rates across all segments.
Consolidated net sales of $3.6 billion increased
2.0% in the quarter and 2.9% in constant currency. Organic net
sales increased 2.4% in the quarter including 2.8% from increased
unit volume partially offset by 0.4% from lower prices.
Orthopaedics net sales of $1.2 billion decreased
2.1% in the quarter and 1.2% in constant currency. Organic net
sales decreased 1.2% in the quarter including 1.5% from lower
prices partially offset by 0.3% from increased unit volume.
MedSurg net sales of $1.6 billion increased 6.2%
in the quarter and 7.0% in constant currency. Organic net sales
increased 6.3% in the quarter including 6.0% from increased unit
volume and 0.3% from higher prices.
Neurotechnology and Spine net sales of $0.7
billion increased 0.7% in the quarter and 1.5% in constant
currency. Organic net sales increased 0.3% in the quarter from
increased unit volume.
Earnings Analysis
Earnings were significantly negatively impacted
by the global response to the COVID-19 pandemic. Reported net
earnings of $493 million increased 19.7% in the quarter. Reported
net earnings per diluted share of $1.30 increased 19.3% in the
quarter. Reported gross profit margin and reported operating income
margin were 65.0% and 17.7% in the quarter. Adjusted gross
profit margin(1) and adjusted operating income margin(1) were 65.3%
and 24.0%, a decline of 110 basis points in the quarter. Adjusted
net earnings(1) of $699 million decreased 2.1% in the quarter.
Adjusted net earnings per diluted share(1) of $1.84 decreased 2.1%
in the quarter.
2020 Outlook
The global response to the COVID-19 pandemic has
had, and we expect will continue to have, a significant negative
impact on Stryker’s operations and financial results. While we
reported overall increased unit volume in the quarter, most of our
businesses saw dramatic declines in the month of March 2020. Due to
the uncertain scope and duration of the pandemic, and uncertain
timing of global recovery and economic normalization, we are unable
to estimate the overall impacts on our operations and financial
results, which could be material. Accordingly, we will not be
providing second quarter or full-year organic sales growth or
earnings guidance for 2020.
(1) A reconciliation of the non-GAAP financial
measures: adjusted gross profit margin, adjusted operating income
and adjusted operating income margin, adjusted net earnings and
adjusted net earnings per diluted share, to the most directly
comparable GAAP measures: gross profit margin, operating income and
operating income margin, net earnings and net earnings per diluted
share, and other important information accompanies this press
release.
Conference Call on Thursday,
April 30, 2020
As previously announced, Stryker will host a
conference call on Thursday, April 30, 2020 at 4:30 p.m.,
Eastern Time, to discuss the company's operating results for the
quarter ended March 31, 2020 and provide an operational
update.
To participate in the conference, call dial
(877) 702-4565 (domestic) or (647) 689-5532 (international) and be
prepared to provide conference ID number 4595129 to the
operator.
A simultaneous webcast of the call will be
accessible via the company's website at www.stryker.com. The call
will be archived on the Investor Relations page of this site.
A recording of the call will also be available
from 8:00 p.m., Eastern Time, on Thursday, April 30, 2020, until
11:59 p.m., Eastern Time, on Thursday, May 7, 2020. To hear this
recording, you may dial (800) 585-8367 (domestic) or (416) 621-4642
(international) and enter conference ID number 4595129.
Caution Concerning Forward-Looking
Statements
This press release contains information that
includes or is based on forward-looking statements within the
meaning of the federal securities laws that are subject to various
risks and uncertainties that could cause our actual results to
differ materially from those expressed or implied in such
statements. Such factors include, but are not limited to: the
impact on our operations and financial results of the COVID-19
pandemic and any related policies and actions by governments or
other third parties; the failure to satisfy any of the closing
conditions to the acquisition of Wright Medical Group N.V.
("Wright"), including the receipt of any required regulatory
clearances (and the risk that such clearances may result in the
imposition of conditions that could adversely affect the expected
benefits of the transaction); timing of the closing of the
acquisition of Wright; unexpected liabilities, costs, charges or
expenses in connection with the acquisition of Wright; the effects
of the proposed Wright transaction (or the announcement thereof) on
the parties' relationships with employees, customers, other
business partners or governmental entities; weakening of economic
conditions that could adversely affect the level of demand for our
products; pricing pressures generally, including cost-containment
measures that could adversely affect the price of or demand for our
products; changes in foreign exchange markets; legislative and
regulatory actions; unanticipated issues arising in connection with
clinical studies and otherwise that affect U.S. Food and Drug
Administration approval of new products, including Wright products;
potential supply disruptions; changes in reimbursement levels from
third-party payors; a significant increase in product liability
claims; the ultimate total cost with respect to recall-related
matters; the impact of investigative and legal proceedings and
compliance risks; resolution of tax audits; the impact of the
federal legislation to reform the United States healthcare system;
costs to comply with medical device regulations; changes in
financial markets; changes in the competitive environment; our
ability to integrate and realize the anticipated benefits of
acquisitions in full or at all or within the expected timeframes,
including the acquisition of Wright; and our ability to realize
anticipated cost savings. Additional information concerning these
and other factors is contained in our filings with the U.S.
Securities and Exchange Commission, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. We disclaim any
intention or obligation to publicly update or revise any
forward-looking statement to reflect any change in our expectations
or in events, conditions or circumstances on which those
expectations may be based, or that affect the likelihood that
actual results will differ from those contained in the
forward-looking statements.
Stryker is one of the world's leading medical
technology companies and, together with its customers, is
driven to make healthcare better. The company offers innovative
products and services in Orthopaedics, Medical and
Surgical, and Neurotechnology and Spine that help
improve patient and hospital outcomes. More information is
available at www.stryker.com.
For investor inquiries please
contact:
Katherine Owen, Vice President, Strategy &
Investor Relations at 269-385-2600 or
katherine.owen@stryker.com
For media inquiries please
contact:
Yin Becker, Vice President, Communications,
Public Affairs and Corporate Marketing at 269-385-2600 or
yin.becker@stryker.com
STRYKER CORPORATION |
For the Three Months March 31 |
(Unaudited - Millions of Dollars, Except Per Share
Amounts) |
CONSOLIDATED STATEMENTS OF EARNINGS |
|
|
|
|
|
|
|
Three Months |
|
2020 |
|
2019 |
|
% Change |
Net
sales |
$ |
3,588 |
|
|
$ |
3,516 |
|
|
2.0 |
% |
Cost of sales |
1,257 |
|
|
1,233 |
|
|
1.9 |
|
Gross
profit |
$ |
2,331 |
|
|
$ |
2,283 |
|
|
2.1 |
% |
% of sales |
65.0 |
% |
|
64.9 |
% |
|
|
Research, development and engineering expenses |
254 |
|
|
225 |
|
|
12.9 |
|
Selling, general and administrative expenses |
1,330 |
|
|
1,403 |
|
|
(5.2 |
) |
Recall charges |
(6 |
) |
|
13 |
|
|
nm |
Amortization of intangible assets |
118 |
|
|
114 |
|
|
3.5 |
|
Total operating expenses |
$ |
1,696 |
|
|
$ |
1,755 |
|
|
(3.4 |
)% |
Operating
income |
$ |
635 |
|
|
$ |
528 |
|
|
20.3 |
% |
% of sales |
17.7 |
% |
|
15.0 |
% |
|
|
Other income (expense), net |
(45 |
) |
|
(48 |
) |
|
(6.3 |
) |
Earnings before income
taxes |
$ |
590 |
|
|
$ |
480 |
|
|
22.9 |
% |
Income taxes |
97 |
|
|
68 |
|
|
42.6 |
|
Net
earnings |
$ |
493 |
|
|
$ |
412 |
|
|
19.7 |
% |
Net earnings per share
of common stock: |
|
|
|
|
|
Basic |
$ |
1.32 |
|
|
$ |
1.10 |
|
|
20.0 |
% |
Diluted |
$ |
1.30 |
|
|
$ |
1.09 |
|
|
19.3 |
% |
Weighted-average
shares outstanding (in millions): |
|
|
|
|
|
Basic |
374.8 |
|
373.3 |
|
|
Diluted |
379.7 |
|
379.3 |
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
March 31 |
|
December 31 |
|
2020 |
|
2019 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
3,964 |
|
|
$ |
4,337 |
|
Marketable securities |
84 |
|
|
88 |
|
Accounts receivable, net |
2,646 |
|
|
2,893 |
|
Inventories |
3,359 |
|
|
3,282 |
|
Prepaid expenses and other current assets |
683 |
|
|
760 |
|
Total current assets |
$ |
10,736 |
|
|
$ |
11,360 |
|
Property, plant and equipment, net |
2,607 |
|
|
2,567 |
|
Goodwill and other intangibles, net |
13,132 |
|
|
13,296 |
|
Noncurrent deferred income tax assets |
1,537 |
|
|
1,575 |
|
Other noncurrent assets |
1,428 |
|
|
1,369 |
|
Total
assets |
$ |
29,440 |
|
|
$ |
30,167 |
|
Liabilities and
shareholders' equity |
|
|
|
Current liabilities |
$ |
4,162 |
|
|
$ |
4,400 |
|
Long-term debt, excluding current maturities |
9,404 |
|
|
10,231 |
|
Income taxes |
1,026 |
|
|
1,068 |
|
Other noncurrent liabilities |
1,733 |
|
|
1,661 |
|
Shareholders' equity |
13,115 |
|
|
12,807 |
|
Total liabilities and
shareholders' equity |
$ |
29,440 |
|
|
$ |
30,167 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
Three Months |
|
2020 |
|
2019 |
Operating
activities |
|
|
|
Net earnings |
$ |
493 |
|
|
$ |
412 |
|
Depreciation |
80 |
|
|
76 |
|
Amortization of intangible assets |
118 |
|
|
114 |
|
Changes in operating assets, liabilities, income taxes payable and
other, net |
(100 |
) |
|
(289 |
) |
Net cash provided by
operating activities |
$ |
591 |
|
|
$ |
313 |
|
Investing
activities |
|
|
|
Acquisitions, net of cash acquired |
$ |
(23 |
) |
|
$ |
(180 |
) |
Change in marketable securities, net |
4 |
|
|
(1 |
) |
Purchases of property, plant and equipment |
(144 |
) |
|
(122 |
) |
Net cash used in
investing activities |
$ |
(163 |
) |
|
$ |
(303 |
) |
Financing
activities |
|
|
|
Borrowings (payments) of debt, net |
$ |
(496 |
) |
|
$ |
(1,353 |
) |
Dividends paid |
(215 |
) |
|
(195 |
) |
Repurchases of common stock |
— |
|
|
(307 |
) |
Other financing, net |
(57 |
) |
|
(92 |
) |
Net cash provided by
(used in) financing activities |
$ |
(768 |
) |
|
$ |
(1,947 |
) |
Effect of exchange rate changes on cash and cash equivalents |
(33 |
) |
|
(5 |
) |
Change in cash and
cash equivalents |
$ |
(373 |
) |
|
$ |
(1,942 |
) |
nm - not meaningful
STRYKER CORPORATION |
For the Three Months March 31 |
(Unaudited - Millions of Dollars) |
SALES GROWTH ANALYSIS |
|
Three Months |
|
|
|
Percentage Change |
|
2020 |
2019 |
|
As Reported |
|
Constant Currency |
Geographic: |
|
|
|
|
|
|
United States |
$ |
2,643 |
|
$ |
2,579 |
|
|
2.5 |
% |
|
2.5 |
% |
International |
945 |
|
937 |
|
|
0.8 |
|
|
4.2 |
|
Total |
$ |
3,588 |
|
$ |
3,516 |
|
|
2.0 |
% |
|
2.9 |
% |
Segment: |
|
|
|
|
|
|
Orthopaedics |
$ |
1,222 |
|
$ |
1,250 |
|
|
(2.1 |
)% |
|
(1.2 |
)% |
MedSurg |
1,622 |
|
1,527 |
|
|
6.2 |
|
|
7.0 |
|
Neurotechnology and Spine |
744 |
|
739 |
|
|
0.7 |
|
|
1.5 |
|
Total |
$ |
3,588 |
|
$ |
3,516 |
|
|
2.0 |
% |
|
2.9 |
% |
SUPPLEMENTAL SALES GROWTH ANALYSIS |
|
Three Months |
|
|
|
|
|
|
|
United States |
|
International |
|
|
|
Percentage Change |
|
2020 |
2019 |
|
As Reported |
|
Constant Currency |
|
As Reported |
|
As Reported |
Constant Currency |
Orthopaedics: |
|
|
|
|
|
|
|
|
|
|
|
Knees |
$ |
432 |
|
$ |
439 |
|
|
(1.7 |
)% |
|
(0.8 |
)% |
|
0.6 |
% |
|
(7.8 |
)% |
(4.5 |
)% |
Hips |
316 |
|
336 |
|
|
(5.9 |
) |
|
(4.8 |
) |
|
(5.7 |
) |
|
(6.4 |
) |
(3.2 |
) |
Trauma and Extremities |
392 |
|
396 |
|
|
(0.8 |
) |
|
0.2 |
|
|
2.7 |
|
|
(6.9 |
) |
(4.3 |
) |
Other |
82 |
|
79 |
|
|
4.7 |
|
|
5.3 |
|
|
9.4 |
|
|
(14.3 |
) |
(11.5 |
) |
|
$ |
1,222 |
|
$ |
1,250 |
|
|
(2.1 |
)% |
|
(1.2 |
)% |
|
0.3 |
% |
|
(7.3 |
)% |
(4.3 |
)% |
MedSurg: |
|
|
|
|
|
|
|
|
|
|
|
Instruments |
$ |
513 |
|
$ |
461 |
|
|
11.1 |
% |
|
11.9 |
% |
|
12.0 |
% |
|
7.8 |
% |
11.4 |
% |
Endoscopy |
455 |
|
470 |
|
|
(3.2 |
) |
|
(2.4 |
) |
|
(2.9 |
) |
|
(4.1 |
) |
(0.4 |
) |
Medical |
587 |
|
531 |
|
|
10.5 |
|
|
11.5 |
|
|
9.1 |
|
|
15.5 |
|
20.3 |
|
Sustainability |
67 |
|
65 |
|
|
2.8 |
|
|
2.8 |
|
|
3.1 |
|
|
nm |
nm |
|
$ |
1,622 |
|
$ |
1,527 |
|
|
6.2 |
% |
|
7.0 |
% |
|
6.0 |
% |
|
6.9 |
% |
11.1 |
% |
Neurotechnology and
Spine: |
|
|
|
|
|
|
|
|
|
|
|
Neurotechnology |
$ |
483 |
|
$ |
469 |
|
|
3.1 |
% |
|
4.0 |
% |
|
0.2 |
% |
|
8.1 |
% |
10.8 |
% |
Spine |
261 |
|
270 |
|
|
(3.5 |
) |
|
(2.8 |
) |
|
(5.6 |
) |
|
3.3 |
|
6.4 |
|
|
$ |
744 |
|
$ |
739 |
|
|
0.7 |
% |
|
1.5 |
% |
|
(2.1 |
)% |
|
6.8 |
% |
9.6 |
% |
Total |
$ |
3,588 |
|
$ |
3,516 |
|
|
2.0 |
% |
|
2.9 |
% |
|
2.5 |
% |
|
0.8 |
% |
4.2 |
% |
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
We supplement the reporting of our financial
information determined under accounting principles generally
accepted in the United States (GAAP) with certain non-GAAP
financial measures, including: percentage sales growth; percentage
sales growth in constant currency; percentage organic sales
growth; adjusted gross profit; adjusted selling, general and
administrative expenses; adjusted research, development and
engineering expenses; adjusted operating income; adjusted other
income (expense), net; adjusted effective income tax rate; adjusted
net earnings; and adjusted net earnings per diluted share (Diluted
EPS). We believe that these non-GAAP financial measures provide
meaningful information to assist investors and shareholders in
understanding our financial results and assessing our prospects for
future performance. Management believes percentage sales growth in
constant currency and the other adjusted measures described above
are important indicators of our operations because they exclude
items that may not be indicative of or are unrelated to our core
operating results and provide a baseline for analyzing trends in
our underlying businesses. Management uses these non-GAAP financial
measures for reviewing the operating results of reportable business
segments and analyzing potential future business trends in
connection with our budget process and bases certain management
incentive compensation on these non-GAAP financial measures.
To measure percentage sales growth in constant
currency, we remove the impact of changes in foreign currency
exchange rates that affect the comparability and trend of sales.
Percentage sales growth in constant currency is calculated by
translating current and prior year results at the same foreign
currency exchange rate. To measure percentage organic sales growth,
we remove the impact of changes in foreign currency exchange rates
and acquisitions, which affect the comparability and trend of
sales. Percentage organic sales growth is calculated by translating
current year results at prior year average foreign currency
exchange rates excluding the impact of acquisitions. To measure
earnings performance on a consistent and comparable basis, we
exclude certain items that affect the comparability of operating
results and the trend of earnings.
Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies' non-GAAP financial measures having
the same or similar names. These adjusted financial measures should
not be considered in isolation or as a substitute for reported
sales growth, gross profit, selling, general and administrative
expenses, research, development and engineering expenses, operating
income, other income (expense), net, effective income tax rate, net
earnings and net earnings per diluted share, the most directly
comparable GAAP financial measures. These non-GAAP financial
measures are an additional way of viewing aspects of our operations
that, when viewed with our GAAP results and the reconciliations to
corresponding GAAP financial measures below, provide a more
complete understanding of our business. We strongly encourage
investors and shareholders to review our financial statements and
publicly-filed reports in their entirety and not to rely on any
single financial measure.
The following reconciles the non-GAAP financial
measures discussed above with the most directly comparable GAAP
financial measures. The weighted-average diluted shares outstanding
used in the calculation of non-GAAP earnings per share are the same
as those used in the calculation of reported earnings per share for
the respective period.
STRYKER CORPORATION |
For the Three Months March 31 |
(Unaudited - Millions of Dollars, Except Per Share
Amounts) |
Reconciliation of Non-GAAP Financial Measures to the Most
Directly Comparable GAAP Financial Measures |
Three Months 2020 |
Gross Profit |
Selling, General & Administrative
Expenses |
Research, Development & Engineering
Expenses |
Operating Income |
Other income (expense), net |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
2,331 |
|
$ |
1,330 |
|
$ |
254 |
|
$ |
635 |
|
$ |
(45 |
) |
$ |
493 |
|
16.4 |
% |
$ |
1.30 |
|
Reported percent net
sales |
65.0 |
% |
37.1 |
% |
7.1 |
% |
17.7 |
% |
(1.3 |
)% |
13.7 |
% |
|
|
Acquisition and
integration-related charges (a) |
|
|
|
|
|
|
|
|
Inventory stepped-up to fair value |
6 |
|
— |
|
— |
|
6 |
|
— |
|
5 |
|
0.1 |
|
0.01 |
|
Other acquisition and integration-related |
— |
|
(31 |
) |
— |
|
31 |
|
— |
|
24 |
|
0.3 |
|
0.06 |
|
Amortization of purchased
intangible assets |
— |
|
— |
|
— |
|
118 |
|
— |
|
96 |
|
0.9 |
|
0.25 |
|
Restructuring-related and
other charges (b) |
4 |
|
(49 |
) |
— |
|
54 |
|
— |
|
42 |
|
0.6 |
|
0.11 |
|
Medical device regulations
(c) |
1 |
|
— |
|
(23 |
) |
24 |
|
— |
|
18 |
|
0.3 |
|
0.05 |
|
Recall-related matters
(d) |
— |
|
— |
|
— |
|
(6 |
) |
— |
|
(4 |
) |
(0.1 |
) |
(0.01 |
) |
Regulatory and legal matters
(e) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Tax matters (f) |
— |
|
— |
|
— |
|
— |
|
— |
|
25 |
|
(4.2 |
) |
0.07 |
|
Adjusted |
$ |
2,342 |
|
$ |
1,250 |
|
$ |
231 |
|
$ |
862 |
|
$ |
(45 |
) |
$ |
699 |
|
14.3 |
% |
$ |
1.84 |
|
Adjusted percent net
sales |
65.3 |
% |
34.8 |
% |
6.4 |
% |
24.0 |
% |
(1.3 |
)% |
19.5 |
% |
|
|
Three Months 2019 |
Gross Profit |
Selling, General & Administrative
Expenses |
Research, Development & Engineering
Expenses |
Operating Income |
Other income (expense), net |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
2,283 |
|
$ |
1,403 |
|
$ |
225 |
|
$ |
528 |
|
$ |
(48 |
) |
$ |
412 |
|
14.2 |
% |
$ |
1.09 |
|
Reported percent net
sales |
64.9 |
% |
39.9 |
% |
6.4 |
% |
15.0 |
% |
(1.4 |
)% |
11.7 |
% |
|
|
Acquisition and
integration-related charges (a) |
|
|
|
|
|
|
|
|
Inventory stepped-up to fair value |
24 |
|
— |
|
— |
|
24 |
|
— |
|
19 |
|
0.3 |
|
0.05 |
|
Other acquisition and integration-related |
— |
|
(114 |
) |
— |
|
114 |
|
— |
|
88 |
|
2.0 |
|
0.23 |
|
Amortization of purchased
intangible assets |
— |
|
— |
|
— |
|
114 |
|
— |
|
91 |
|
1.3 |
|
0.24 |
|
Restructuring-related and
other charges (b) |
5 |
|
(52 |
) |
— |
|
56 |
|
— |
|
50 |
|
(0.3 |
) |
0.13 |
|
Medical device regulations
(c) |
— |
|
— |
|
(7 |
) |
7 |
|
— |
|
6 |
|
0.1 |
|
0.01 |
|
Recall-related matters
(d) |
— |
|
— |
|
— |
|
13 |
|
— |
|
10 |
|
0.3 |
|
0.03 |
|
Regulatory and legal matters
(e) |
— |
|
(25 |
) |
— |
|
25 |
|
— |
|
19 |
|
0.4 |
|
0.05 |
|
Tax matters (f) |
— |
|
— |
|
— |
|
— |
|
— |
|
19 |
|
(3.9 |
) |
0.05 |
|
Adjusted |
$ |
2,312 |
|
$ |
1,212 |
|
$ |
218 |
|
$ |
881 |
|
$ |
(48 |
) |
$ |
714 |
|
14.4 |
% |
$ |
1.88 |
|
Adjusted percent net
sales |
65.8 |
% |
34.4 |
% |
6.2 |
% |
25.1 |
% |
(1.4 |
)% |
20.3 |
% |
|
|
(a) |
Charges represent certain
acquisition and integration-related costs associated with
acquisitions. |
(b) |
Charges represent the costs associated with certain
restructuring-related activities associated with workforce
reductions and other restructuring-related activities. |
(c) |
Charges represent the costs specific to updating our quality
system, product labeling, asset write-offs and product
remanufacturing to comply with the medical device reporting
regulations and other requirements of the new medical device
regulations in the European Union and China. |
(d) |
Charges represent changes in our
best estimate of the minimum end of the range of probable loss to
resolve certain recall-related matters. |
(e) |
Our best estimate of the minimum of the range of probable loss to
resolve certain regulatory or other legal matters and the amount of
favorable awards from settlements. |
(f) |
Benefits and charges represent the accounting impact of certain
significant and discrete tax items, including adjustments related
to the Tax Cuts and Jobs Act of 2017, and the transfer of certain
intellectual properties between tax jurisdictions. |
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