This medical device maker beat earnings estimates by two cents, and is forecast to grow at double-digit rates for the next few years
Stryker Corp. (SYK)
From Internet Wealth Builder
Stryker Corp. is one of the world’s leading medical technology companies, selling its products and services in over 100 countries. An inventive Michigan doctor founded the company in 1941 to sell the products he created. The company went public in 1979. It now employs more than 25,000 people and owns 5,200 patents. It is a member of the Fortune 500.
Stryker reported solid second-quarter results (to June 30), with sales increasing 16.8% to $2.8 billion. Excluding the impact of acquisitions, organic net sales were ahead by 6.6%. The company reported sales increases from all its operating divisions: Orthopedics, MedSurg, and Neurotechnology and Spine.
Adjusted net earnings, which strip out the effects of one-time items, were $525 million ($1.39 per share, fully diluted), up 15.8% from the prior year.
For the first six months of fiscal 2016, net sales were ahead 10.9% to $5.3 billion. Net earnings were up 26.9% to $782 million ($2.07 per share).
Looking ahead, the company increased its full-year guidance. Organic sales growth is now expected to be in the range of 6.0% - 6.5% compared to the prior target of 5.5% - 6.5%. Adjusted net earnings per diluted share will be in the range of $5.70 - $5.80 compared to the previous target of $5.65 - $5.80.
This is a company that has grown both organically and by acquisitions over the years. The latest purchase was Stanmore Implants Worldwide Ltd. of Britain in a deal worth £35.6 million.
“The acquisition of Stanmore Implants provides Stryker with differentiated technologies designed to provide the most effective solutions for orthopedic oncology surgeons,” said David Floyd, Group President, Stryker Orthopedics. “This addition underscores Stryker’s commitment to our core joint replacement business and expands our presence in the global orthopedic oncology market.”
Earlier, Stryker announced the closing of a deal to acquire Physio-Control International, Inc. for $1.28 billion. The company develops, manufactures and markets monitors/defibrillators, automated external defibrillators, and CPR-assist devices along with data management and support services.
Other recent corporate additions include the Neuro Portfolio of Synergetics USA and Sage Products (oral and skin care products).
Action now: Buy.
Gordon Pape, Internet Wealth Builder, www.buildingwealth.ca, 1-888- 287-8229, August 29, 2016