Stryker reports 2024 operating results and 2025 outlook
Stryker (NYSE:SYK) reported strong Q4 and full-year 2024 results, with Q4 reported net sales increasing 10.7% to $6.4 billion and full-year sales rising 10.2% to $22.6 billion. The company achieved organic net sales growth of 10.2% for both periods.
Q4 adjusted EPS increased 15.9% to $4.01, while full-year adjusted EPS grew 15.0% to $12.19. However, reported EPS decreased 52.7% to $1.41 in Q4 and 5.9% to $7.76 for the full year, primarily due to $818 million in non-cash charges for goodwill and other impairments related to the Spine business.
For 2025, Stryker expects organic net sales growth between 8.0% and 9.0%, with adjusted EPS projected at $13.45-$13.70. The company anticipates closing the Inari acquisition in February 2025, expected to contribute approximately $590 million in sales for the stub period.
Stryker (NYSE:SYK) ha riportato risultati solidi per il quarto trimestre e l'intero anno 2024, con le vendite nette del Q4 che sono aumentate del 10,7% a 6,4 miliardi di dollari e le vendite annuali che sono cresciute del 10,2% a 22,6 miliardi di dollari. L'azienda ha registrato una crescita organica delle vendite nette del 10,2% per entrambi i periodi.
Il risultato per azione rettificato (EPS) del Q4 è aumentato del 15,9% a 4,01 dollari, mentre l'EPS rettificato per l'intero anno è cresciuto del 15% a 12,19 dollari. Tuttavia, l'EPS riportato è diminuito del 52,7% a 1,41 dollari nel Q4 e del 5,9% a 7,76 dollari per l'intero anno, principalmente a causa di 818 milioni di dollari in oneri non monetari per avviamento e altre svalutazioni legate al settore della colonna vertebrale.
Per il 2025, Stryker prevede una crescita organica delle vendite nette compresa tra l'8,0% e il 9,0%, con un EPS rettificato previsto tra 13,45 e 13,70 dollari. L'azienda si aspetta di concludere l'acquisizione di Inari a febbraio 2025, un'operazione che dovrebbe contribuire con circa 590 milioni di dollari in vendite per il periodo successivo.
Stryker (NYSE:SYK) informó resultados sólidos para el cuarto trimestre y el año completo 2024, con ventas netas reportadas del Q4 que aumentaron un 10.7% a 6.4 mil millones de dólares y ventas anuales que crecieron un 10.2% a 22.6 mil millones de dólares. La compañía logró un crecimiento orgánico de ventas netas del 10.2% en ambos períodos.
El EPS ajustado del Q4 aumentó un 15.9% a 4.01 dólares, mientras que el EPS ajustado anual creció un 15.0% a 12.19 dólares. Sin embargo, el EPS reportado disminuyó un 52.7% a 1.41 dólares en el Q4 y un 5.9% a 7.76 dólares para todo el año, principalmente debido a 818 millones de dólares en cargos no monetarios por deterioro de goodwill y otros relacionados con el negocio de columna vertebral.
Para 2025, Stryker espera un crecimiento orgánico de ventas netas entre el 8.0% y el 9.0%, con un EPS ajustado proyectado entre 13.45 y 13.70 dólares. La compañía anticipa cerrar la adquisición de Inari en febrero de 2025, que se espera contribuya con aproximadamente 590 millones de dólares en ventas para el período restante.
Stryker (NYSE:SYK)는 2024년 4분기 및 전체 연도에 대해 강력한 실적을 보고했으며, 4분기 순매출이 10.7% 증가하여 64억 달러에 달하고, 전체 연도 매출은 10.2% 증가하여 226억 달러에 달했습니다. 회사는 두 기간 모두에서 10.2%의 유기적 순매출 성장을 달성했습니다.
4분기 조정 주당순이익(EPS)은 15.9% 증가하여 4.01달러에 이르렀고, 연간 조정 EPS는 15.0% 성장하여 12.19달러에 도달했습니다. 그러나, 보고된 EPS는 4분기에 52.7% 감소하여 1.41달러였고 전체 연도 동안에는 5.9% 감소하여 7.76달러로 떨어졌습니다. 이는 주로 척추 사업 관련으로 발생한 8억 1800만 달러의 비현금성 자산 손상 비용 때문입니다.
2025년을 위해 Stryker는 유기적 순매출 성장률이 8.0%에서 9.0% 사이가 될 것으로 예상하며, 조정 EPS는 13.45달러에서 13.70달러로 예상하고 있습니다. 이 회사는 2025년 2월에 Inari 인수 계약을 마무리할 것으로 예상하며, 이는 남은 기간 동안 약 5억 9000만 달러의 매출을 기여할 것으로 보입니다.
Stryker (NYSE:SYK) a annoncé de solides résultats pour le quatrième trimestre et l'année complète 2024, avec des ventes nettes déclarées au T4 augmentant de 10,7 % pour atteindre 6,4 milliards de dollars et des ventes annuelles en hausse de 10,2 % pour atteindre 22,6 milliards de dollars. L'entreprise a réalisé une croissance organique des ventes nettes de 10,2 % pour les deux périodes.
Le BPA ajusté pour le T4 a augmenté de 15,9 % pour atteindre 4,01 dollars, tandis que le BPA ajusté pour l'année entière a progressé de 15,0 % pour atteindre 12,19 dollars. Cependant, le BPA déclaré a diminué de 52,7 % pour s'établir à 1,41 dollar au T4 et de 5,9 % pour s'établir à 7,76 dollars pour l'ensemble de l'année, principalement en raison de 818 millions de dollars de charges hors caisse liées à la dépréciation de goodwill et à d'autres dépréciations liées à l'activité de la colonne vertébrale.
Pour 2025, Stryker s'attend à une croissance organique des ventes nettes comprise entre 8,0 % et 9,0 %, avec un BPA ajusté prévu entre 13,45 et 13,70 dollars. L'entreprise prévoit de finaliser l'acquisition d'Inari en février 2025, qui devrait contribuer environ 590 millions de dollars de ventes pour la période restante.
Stryker (NYSE:SYK) hat starke Ergebnisse für das vierte Quartal und das Gesamtjahr 2024 berichtet, wobei die Nettoumsätze im Q4 um 10,7 % auf 6,4 Milliarden Dollar gestiegen sind und die Jahresumsätze um 10,2 % auf 22,6 Milliarden Dollar zugenommen haben. Das Unternehmen erzielte in beiden Perioden ein organisches Wachstum des Nettoumsatzes von 10,2 %.
Der bereinigte Gewinn pro Aktie (EPS) für das Q4 stieg um 15,9 % auf 4,01 Dollar, während der bereinigte EPS für das gesamte Jahr um 15,0 % auf 12,19 Dollar wuchs. Allerdings sank der ausgewiesene EPS im Q4 um 52,7 % auf 1,41 Dollar und im Gesamtjahr um 5,9 % auf 7,76 Dollar, was hauptsächlich auf 818 Millionen Dollar an nicht zahlungswirksamen Aufwendungen für Goodwill und andere Wertminderungen im Zusammenhang mit dem Wirbelsäulengeschäft zurückzuführen ist.
Für 2025 erwartet Stryker ein organisches Wachstum des Nettoumsatzes zwischen 8,0 % und 9,0 %, wobei der bereinigte EPS auf 13,45-13,70 Dollar geschätzt wird. Das Unternehmen rechnet damit, die Übernahme von Inari im Februar 2025 abzuschließen, die voraussichtlich etwa 590 Millionen Dollar an Umsatz für den verbleibenden Zeitraum beitragen wird.
- Q4 net sales increased 10.7% to $6.4 billion
- Full-year revenue grew 10.2% to $22.6 billion
- Q4 adjusted operating income margin increased 200 bps to 29.2%
- Q4 adjusted EPS grew 15.9% to $4.01
- Strong 2025 guidance with 8-9% organic growth projected
- Q4 reported EPS decreased 52.7% to $1.41
- $818 million in goodwill and impairment charges for Spine business
- Expected dilutive impact of $0.20-$0.30 on adjusted EPS from Inari acquisition
- Spine business facing decreased future product demand due to competitive environment
Insights
Stryker's Q4 results reveal a company executing strongly across multiple fronts while strategically repositioning its portfolio. The MedSurg and Neurotechnology segment continues to outperform, posting
The
Looking ahead to 2025, the projected
The sustained margin expansion - with adjusted operating margins reaching
Portage, Michigan, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Stryker (NYSE:SYK) reported operating results for the fourth quarter and full year of 2024:
Fourth Quarter Results
- Reported net sales increased
10.7% to$6.4 billion - Organic net sales increased
10.2% - Reported operating income margin of
9.0% - Adjusted operating income margin(1) increased 200 bps to
29.2% - Reported EPS decreased
52.7% to$1.41 - Adjusted EPS(1) increased
15.9% to$4.01
Fourth Quarter Net Sales Growth Overview | ||||||||||||||
Reported | Foreign Currency Exchange | Constant Currency | Acquisitions / Divestitures | Organic | ||||||||||
MedSurg and Neurotechnology | 10.6 | % | (0.5) % | 11.1 | % | 1.0 | % | 10.1 | % | |||||
Orthopaedics | 10.8 | (0.5) | 11.3 | 1.1 | 10.2 | |||||||||
Total | 10.7 | % | (0.5) % | 11.2 | % | 1.0 | % | 10.2 | % |
Full Year Results
- Reported net sales increased
10.2% to$22.6 billion - Organic net sales increased
10.2% - Reported operating income margin of
16.3% - Adjusted operating income margin(1) increased 110 bps to
25.3% - Reported EPS decreased
5.9% to$7.76 - Adjusted EPS(1) increased
15.0% to$12.19
Full Year Net Sales Growth Overview | ||||||||||||||
Reported | Foreign Currency Exchange | Constant Currency | Acquisitions / Divestitures | Organic | ||||||||||
MedSurg and Neurotechnology | 11.1 | % | (0.5) % | 11.6 | % | 0.4 | % | 11.2 | % | |||||
Orthopaedics | 8.9 | (0.5) | 9.4 | 0.7 | 8.7 | |||||||||
Total | 10.2 | % | (0.5) % | 10.7 | % | 0.5 | % | 10.2 | % |
“We delivered another year of double-digit organic sales growth while continuing to expand adjusted operating margins and drive adjusted earnings per share growth,” said Kevin A. Lobo, Chair and Chief Executive Officer, Stryker. “We also had many product launches and were active in M&A to further enhance our position in high-growth end markets. I would like to thank our teams for their efforts in delivering excellent results and positioning Stryker for sustained success in 2025 and beyond.”
Sales Analysis
Consolidated net sales of
MedSurg and Neurotechnology net sales of
Orthopaedics net sales of
Earnings Analysis
Reported net earnings of
2025 Outlook
Based on our momentum exiting 2024, a sustained level of procedural volumes, strong demand for our capital products and our presence in healthy end markets, we expect organic net sales growth(2) to be in the range of
As it relates to the pending acquisition of Inari, we anticipate closing this transaction toward the end of February. Based on that timing, Inari is expected to deliver approximately
As it relates to the sale of our Spinal Implants business, we expect that the impact of this transaction will be absorbed in the above guidance for organic net sales growth(2) and adjusted net earnings per diluted share(2).
(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.
(2) We are unable to present a quantitative reconciliation of our expected net sales growth to expected organic net sales growth as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisitions and divestitures and the impact of foreign currency exchange rates. We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share or our expected operating income margin to expected adjusted operating income margin as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of structural optimization and other special charges, acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.
Conference Call on Tuesday, January 28, 2025
As previously announced, we will host a conference call on Tuesday, January 28, 2025 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter and year ended December 31, 2024 and provide an operational update.
Please register for this conference call at: https://www.veracast.com/webcasts/stryker/events/SYK4Q24.cfm. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry. Registration is open throughout the live call. To ensure you are connected prior to the beginning of the call, we suggest registering a minimum of 15 minutes before the start of the call.
A simultaneous webcast of the call will be accessible via the Investor Relations page of our website at www.stryker.com. For those not planning to ask a question of management, we recommend listening via the webcast. Please allow 15 minutes to register, download and install any necessary software.
Following the conference call, a replay will be available on our website up to one year from the time of the earnings call.
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 law 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 risks and uncertainties include, but are not limited to: weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our or Inari Medical, Inc.’s (“Inari”) products; geopolitical risks, including from international conflicts, which could, among other things, lead to increased market volatility; pricing pressures generally, including cost-containment measures that have adversely affected and could in the future adversely affect the price of or demand for our or Inari’s products; changes in foreign currency exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect approval of new products, including Inari products, by the United States Food and Drug Administration and foreign regulatory agencies; inflationary pressures; increased interest rates or interest rate volatility; supply chain disruptions; changes in labor markets; changes in coverage and reimbursement levels from third-party payors; changes in the competitive environment; breaches, failures or other disruptions of our or our vendors’ or customers’ information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft; a significant increase in product liability claims; the ultimate total cost with respect to recall-related and other regulatory and quality matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; changes in tax laws and regulations; the impact of legislation to reform the healthcare system in the United States or other countries; costs to comply with medical device regulations; changes in financial markets; changes in our credit ratings; our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes, including our acquisition of Inari; our ability to realize any anticipated cost savings; potential negative impacts resulting from climate change or other environmental, social and governance and sustainability related matters; the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties; uncertainties as to the timing of the tender offer for shares of Inari common stock and the subsequent merger with Inari; uncertainties as to how many of Inari’s stockholders will tender their shares in the tender offer; the failure to satisfy any of the closing conditions to the acquisition of Inari, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period (and the risk that such governmental approval may result in the imposition of conditions that could adversely affect the expected benefits of the transaction); delays in consummating the acquisition of Inari or the risk that the transaction may not close at all; unexpected liabilities, costs, charges or expenses in connection with the acquisition of Inari; and the effects of the proposed Inari transaction (or the announcement thereof) on the parties’ relationships with employees, customers, other business partners or governmental entities. Additional information concerning these and other factors is contained in our filings with the United States 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, except to the extent required by law.
Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology and Orthopaedics that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually. More information is available at www.stryker.com.
For investor inquiries please contact:
Jason Beach, Vice President, Finance and Investor Relations at 269-385-2600 or jason.beach@stryker.com
For media inquiries please contact:
Yin Becker, Vice President, Chief Corporate Affairs Officer at 269-385-2600 or yin.becker@stryker.com
STRYKER CORPORATION | |||||||||||||||||||||
For the Three Months and Full Year December 31 | |||||||||||||||||||||
(Unaudited - Millions of Dollars, Except Per Share Amounts) | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||||
Three Months | Full Year | ||||||||||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
Net sales | $ | 6,436 | $ | 5,815 | 10.7 | % | $ | 22,595 | $ | 20,498 | 10.2 | % | |||||||||
Cost of sales | 2,262 | 2,112 | 7.1 | 8,155 | 7,440 | 9.6 | |||||||||||||||
Gross profit | $ | 4,174 | $ | 3,703 | 12.7 | % | $ | 14,440 | $ | 13,058 | 10.6 | % | |||||||||
% of sales | 64.9 | % | 63.7 | % | 63.9 | % | 63.7 | % | |||||||||||||
Research, development and engineering expenses | 358 | 350 | 2.3 | 1,466 | 1,388 | 5.6 | |||||||||||||||
Selling, general and administrative expenses | 2,123 | 1,921 | 10.5 | 7,685 | 7,111 | 8.1 | |||||||||||||||
Amortization of intangible assets | 156 | 149 | 4.7 | 623 | 635 | (1.9) | |||||||||||||||
Goodwill and other impairments | 956 | 26 | nm | 977 | 36 | nm | |||||||||||||||
Total operating expenses | $ | 3,593 | $ | 2,446 | 46.9 | % | $ | 10,751 | $ | 9,170 | 17.2 | % | |||||||||
Operating income | $ | 581 | $ | 1,257 | (53.8) % | $ | 3,689 | $ | 3,888 | (5.1) % | |||||||||||
% of sales | 9.0 | % | 21.6 | % | 16.3 | % | 19.0 | % | |||||||||||||
Other income (expense), net | (53) | (31) | 71.0 | (197) | (215) | (8.4) | |||||||||||||||
Earnings before income taxes | $ | 528 | $ | 1,226 | (56.9) % | $ | 3,492 | $ | 3,673 | (4.9) % | |||||||||||
Income taxes | (18) | 83 | (121.7) | 499 | 508 | (1.8) | |||||||||||||||
Net earnings | $ | 546 | $ | 1,143 | (52.2) % | $ | 2,993 | $ | 3,165 | (5.4) % | |||||||||||
Net earnings per share of common stock: | |||||||||||||||||||||
Basic | $ | 1.43 | $ | 3.01 | (52.5) % | $ | 7.86 | $ | 8.34 | (5.8) % | |||||||||||
Diluted | $ | 1.41 | $ | 2.98 | (52.7) % | $ | 7.76 | $ | 8.25 | (5.9) % | |||||||||||
Weighted-average shares outstanding (in millions): | |||||||||||||||||||||
Basic | 381.3 | 380.0 | 381.0 | 379.6 | |||||||||||||||||
Diluted | 386.1 | 383.9 | 385.6 | 383.7 |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
December 31 | |||||
2024 | 2023 | ||||
Assets | |||||
Cash and cash equivalents | $ | 3,652 | $ | 2,971 | |
Short-term investments | 750 | — | |||
Marketable securities | 91 | 82 | |||
Accounts receivable, net | 3,987 | 3,765 | |||
Inventories | 4,774 | 4,843 | |||
Prepaid expenses and other current assets | 1,593 | 857 | |||
Total current assets | $ | 14,847 | $ | 12,518 | |
Property, plant and equipment, net | 3,448 | 3,215 | |||
Goodwill and other intangibles, net | 20,250 | 19,836 | |||
Noncurrent deferred income tax assets | 1,742 | 1,670 | |||
Other noncurrent assets | 2,684 | 2,673 | |||
Total assets | $ | 42,971 | $ | 39,912 | |
Liabilities and shareholders' equity | |||||
Current liabilities | $ | 7,616 | $ | 7,921 | |
Long-term debt, excluding current maturities | 12,188 | 10,901 | |||
Income taxes | 349 | 567 | |||
Other noncurrent liabilities | 2,184 | 1,930 | |||
Shareholders' equity | 20,634 | 18,593 | |||
Total liabilities and shareholders' equity | $ | 42,971 | $ | 39,912 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
December 31 | |||||||
2024 | 2023 | ||||||
Operating activities | |||||||
Net earnings | $ | 2,993 | $ | 3,165 | |||
Depreciation | 427 | 393 | |||||
Amortization of intangible assets | 623 | 635 | |||||
Changes in operating assets, liabilities, income taxes payable and other, net | 114 | (482) | |||||
Net cash provided by operating activities | $ | 4,157 | $ | 3,711 | |||
Investing activities | |||||||
Acquisitions, net of cash acquired | $ | (1,628) | $ | (390) | |||
Purchases of property, plant and equipment | (755) | (575) | |||||
Other investing, net | (617) | 3 | |||||
Net cash used in investing activities | $ | (3,000) | $ | (962) | |||
Financing activities | |||||||
Borrowings (payments) of debt, net | $ | 940 | $ | (277) | |||
Payments of dividends | (1,219) | (1,139) | |||||
Other financing, net | (246) | (178) | |||||
Net cash provided by (used in) financing activities | $ | (525) | $ | (1,594) | |||
Effect of exchange rate changes on cash and cash equivalents | (36) | (28) | |||||
Change in cash and cash equivalents | $ | 596 | $ | 1,127 |
nm - not meaningful
STRYKER CORPORATION |
For the Three Months and Full Year December 31 |
(Unaudited - Millions of Dollars) |
SALES GROWTH ANALYSIS | |||||||||||||||||||
Three Months | Full Year | ||||||||||||||||||
Percentage Change | Percentage Change | ||||||||||||||||||
2024 | 2023 | As Reported | Constant Currency | 2024 | 2023 | As Reported | Constant Currency | ||||||||||||
Geographic: | |||||||||||||||||||
United States | $ | 4,873 | $ | 4,356 | 11.8 | % | 11.8 | % | $ | 16,943 | $ | 15,257 | 11.0 | % | 11.0 | % | |||
International | 1,563 | 1,459 | 7.2 | 9.2 | 5,652 | 5,241 | 7.9 | 9.8 | |||||||||||
Total | $ | 6,436 | $ | 5,815 | 10.7 | % | 11.2 | % | $ | 22,595 | $ | 20,498 | 10.2 | % | 10.7 | % | |||
Segment: | |||||||||||||||||||
MedSurg and Neurotechnology | $ | 3,882 | $ | 3,511 | 10.6 | % | 11.1 | % | $ | 13,518 | $ | 12,163 | 11.1 | % | 11.6 | % | |||
Orthopaedics | 2,554 | 2,304 | 10.8 | 11.3 | 9,077 | 8,335 | 8.9 | 9.4 | |||||||||||
Total | $ | 6,436 | $ | 5,815 | 10.7 | % | 11.2 | % | $ | 22,595 | $ | 20,498 | 10.2 | % | 10.7 | % |
SUPPLEMENTAL SALES GROWTH ANALYSIS | |||||||||||||||||
Three Months | |||||||||||||||||
United States | International | ||||||||||||||||
Percentage Change | |||||||||||||||||
2024 | 2023 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | |||||||||||
MedSurg and Neurotechnology: | |||||||||||||||||
Instruments | $ | 790 | $ | 726 | 8.8 | % | 9.1 | % | 8.8 | % | 9.0 | % | 10.0 | % | |||
Endoscopy | 1,006 | 902 | 11.5 | 12.3 | 13.1 | 3.9 | 8.2 | ||||||||||
Medical | 1,142 | 1,042 | 9.6 | 10.1 | 12.0 | 0.1 | 2.9 | ||||||||||
Neurovascular | 341 | 320 | 6.8 | 7.8 | 12.0 | 3.6 | 5.3 | ||||||||||
Neuro Cranial | 603 | 521 | 15.5 | 15.8 | 18.5 | 2.3 | 3.8 | ||||||||||
$ | 3,882 | $ | 3,511 | 10.6 | % | 11.1 | % | 12.7 | % | 3.6 | % | 5.9 | % | ||||
Orthopaedics: | |||||||||||||||||
Knees | $ | 687 | $ | 630 | 9.0 | % | 9.5 | % | 8.5 | % | 10.7 | % | 12.3 | % | |||
Hips | 463 | 414 | 11.6 | 12.2 | 7.1 | 20.2 | 21.6 | ||||||||||
Trauma and Extremities | 996 | 860 | 15.8 | 16.1 | 17.4 | 11.5 | 12.5 | ||||||||||
Spinal Implants | 186 | 181 | 3.2 | 3.7 | 2.3 | 5.2 | 6.9 | ||||||||||
Other | 222 | 219 | 1.3 | 2.2 | 1.3 | 1.4 | 4.2 | ||||||||||
$ | 2,554 | $ | 2,304 | 10.8 | % | 11.3 | % | 10.5 | % | 11.7 | % | 13.2 | % | ||||
Total | $ | 6,436 | $ | 5,815 | 10.7 | % | 11.2 | % | 11.8 | % | 7.2 | % | 9.2 | % |
Full Year | |||||||||||||||||
United States | International | ||||||||||||||||
Percentage Change | |||||||||||||||||
2024 | 2023 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | |||||||||||
MedSurg and Neurotechnology: | |||||||||||||||||
Instruments | $ | 2,834 | $ | 2,534 | 11.9 | % | 12.1 | % | 12.5 | % | 9.5 | % | 10.6 | % | |||
Endoscopy | 3,389 | 3,068 | 10.5 | 11.0 | 11.1 | 7.7 | 10.7 | ||||||||||
Medical | 3,852 | 3,459 | 11.4 | 11.7 | 14.6 | (2.0) | (0.3) | ||||||||||
Neurovascular | 1,307 | 1,226 | 6.6 | 8.2 | 4.7 | 7.9 | 10.5 | ||||||||||
Neuro Cranial | 2,136 | 1,876 | 13.9 | 14.1 | 15.0 | 8.7 | 10.2 | ||||||||||
$ | 13,518 | $ | 12,163 | 11.1 | % | 11.6 | % | 12.7 | % | 5.9 | % | 7.9 | % | ||||
Orthopaedics: | |||||||||||||||||
Knees | $ | 2,447 | $ | 2,273 | 7.6 | % | 8.2 | % | 6.7 | % | 10.4 | % | 12.2 | % | |||
Hips | 1,704 | 1,544 | 10.3 | 11.3 | 7.2 | 15.9 | 18.4 | ||||||||||
Trauma and Extremities | 3,507 | 3,147 | 11.4 | 11.6 | 12.6 | 8.3 | 9.1 | ||||||||||
Spinal Implants | 707 | 713 | (0.7) | (0.3) | (2.1) | 2.5 | 3.8 | ||||||||||
Other | 712 | 658 | 8.1 | 9.6 | 7.3 | 10.1 | 15.4 | ||||||||||
$ | 9,077 | $ | 8,335 | 8.9 | % | 9.4 | % | 8.4 | % | 10.2 | % | 12.0 | % | ||||
Total | $ | 22,595 | $ | 20,498 | 10.2 | % | 10.7 | % | 11.0 | % | 7.9 | % | 9.8 | % |
Note: Fourth quarter and full year 2024 had one more selling day than 2023. In the fourth quarter 2024, we reorganized our Spine business to align with certain updates to our internal reporting structure. The spine enabling technologies portfolio (Enabling Technologies) was reclassified to Other Orthopaedics and Spine and the interventional spine portfolio was reclassified to Neuro Cranial. Consequently, the remaining Spine business was renamed to Spinal Implants. In addition, we changed the name of our “Orthopaedics and Spine” operating segment to “Orthopaedics.” The segment name change had no impact on the composition of our segments or on previously reported financial position, results of operations, cash flows or segment operating results. Neuro Cranial includes sales related to interventional spine of
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 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 income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe 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, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions and divestitures. 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. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded.
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, income taxes, 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 adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.
STRYKER CORPORATION | ||||||||||||||||||||||||||
For the Three Months and Full Year December 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 2024 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | |||||||||||||||||
Reported | $ | 4,174 | $ | 2,123 | $ | 358 | $ | 581 | $ | (53 | ) | $ | (18 | ) | $ | 546 | (3.4) % | $ | 1.41 | |||||||
Reported percent net sales | 64.9 | % | 33.0 | % | 5.6 | % | 9.0 | % | (0.8) % | nm | 8.5 | % | ||||||||||||||
Acquisition and integration-related costs | ||||||||||||||||||||||||||
Inventory stepped-up to fair value | 8 | — | — | 8 | — | 3 | 5 | 0.2 | 0.01 | |||||||||||||||||
Other acquisition and integration-related (a) | — | (58) | (1) | 59 | — | 9 | 50 | (0.1) | 0.13 | |||||||||||||||||
Amortization of purchased intangible assets | — | — | — | 156 | — | 32 | 124 | 1.5 | 0.32 | |||||||||||||||||
Structural optimization and other special charges (b) | 18 | (26) | (2) | 46 | 1 | 10 | 37 | 1.0 | 0.06 | |||||||||||||||||
Goodwill and other impairments (c) | — | — | — | 956 | — | 120 | 836 | (5.2) | 2.21 | |||||||||||||||||
Medical device regulations (d) | 4 | — | (13) | 17 | — | 5 | 12 | 0.3 | 0.03 | |||||||||||||||||
Recall-related matters (e) | — | (18) | — | 18 | — | 5 | 13 | 0.3 | 0.04 | |||||||||||||||||
Regulatory and legal matters (f) | — | (37) | — | 37 | — | 7 | 30 | 0.3 | 0.08 | |||||||||||||||||
Tax matters (g) | — | — | — | — | 1 | 108 | (107) | 20.5 | (0.28) | |||||||||||||||||
Adjusted | $ | 4,204 | $ | 1,984 | $ | 342 | $ | 1,878 | $ | (51) | $ | 281 | $ | 1,546 | 15.4 | % | $ | 4.01 | ||||||||
Adjusted percent net sales | 65.3 | % | 30.8 | % | 5.3 | % | 29.2 | % | (0.8) % | nm | 24.0 | % |
Three Months 2023 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||
Reported | $ | 3,703 | $ | 1,921 | $ | 350 | $ | 1,257 | $ | (31 | ) | $ | 83 | $ | 1,143 | 6.8 | % | $ | 2.98 | ||||||
Reported percent net sales | 63.7 | % | 33.0 | % | 6.0 | % | 21.6 | % | (0.5) % | nm | 19.7 | % | |||||||||||||
Acquisition and integration-related costs | |||||||||||||||||||||||||
Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | ||||||||||||||||
Other acquisition and integration-related (a) | — | (13) | — | 13 | — | — | 13 | (0.2) | 0.04 | ||||||||||||||||
Amortization of purchased intangible assets | — | — | — | 149 | — | 28 | 121 | 0.6 | 0.31 | ||||||||||||||||
Structural optimization and other special charges (b) | 9 | (28) | (1) | 38 | — | 8 | 30 | 0.3 | 0.05 | ||||||||||||||||
Goodwill and other impairments (c) | — | — | — | 26 | — | 7 | 19 | 0.2 | 0.08 | ||||||||||||||||
Medical device regulations (d) | 1 | — | (21) | 22 | — | 5 | 17 | 0.1 | 0.04 | ||||||||||||||||
Recall-related matters (e) | — | (6) | — | 6 | — | 1 | 5 | — | 0.02 | ||||||||||||||||
Regulatory and legal matters (f) | — | (73) | — | 73 | — | 25 | 48 | 1.2 | 0.12 | ||||||||||||||||
Tax matters (g) | — | — | — | — | — | 70 | (70) | 5.6 | (0.18) | ||||||||||||||||
Adjusted | $ | 3,713 | $ | 1,801 | $ | 328 | $ | 1,584 | $ | (31 | ) | $ | 227 | $ | 1,326 | 14.6 | % | $ | 3.46 | ||||||
Adjusted percent net sales | 63.9 | % | 31.0 | % | 5.6 | % | 27.2 | % | (0.5) % | nm | 22.8 | % |
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
Three Months | |||||
2024 | 2023 | ||||
Termination of sales relationships | $ | 1 | $ | 3 | |
Employee retention and workforce reductions | 5 | 3 | |||
Changes in the fair value of contingent consideration | 20 | 6 | |||
Manufacturing integration costs | 1 | — | |||
Other integration-related activities (e.g., deal costs and legal entity rationalization) | 32 | 1 | |||
Adjustments to Operating Income | $ | 59 | $ | 13 | |
Other income taxes related to acquisition and integration-related costs | 9 | — | |||
Adjustments to Income Taxes | $ | 9 | $ | — | |
Adjustments to Net Earnings | $ | 50 | $ | 13 |
(b) Structural optimization and other special charges represent the costs associated with:
Three Months | ||||||
2024 | 2023 | |||||
Employee retention and workforce reductions | $ | 9 | $ | 6 | ||
Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 13 | 14 | ||||
Product line exits | 28 | 4 | ||||
Termination of sales relationships in certain countries | 1 | — | ||||
Other charges | (5) | 14 | ||||
Adjustments to Operating Income | $ | 46 | $ | 38 | ||
Adjustments to Other Income (Expense), Net | $ | 1 | $ | — | ||
Adjustments to Income Taxes | $ | 10 | $ | 8 | ||
Adjustments to Net Earnings | $ | 37 | $ | 30 |
(c) Goodwill and other impairments represent the costs associated with:
Three Months | |||||
2024 | 2023 | ||||
Goodwill impairments | $ | 456 | $ | — | |
Certain long-lived and intangible asset write-offs and impairments | 455 | 14 | |||
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 45 | 12 | |||
Adjustments to Operating Income | $ | 956 | $ | 26 | |
Adjustments to Income Taxes | $ | 120 | $ | 7 | |
Adjustments to Net Earnings | $ | 836 | $ | 19 |
(d) 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.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
Three Months | |||||||
2024 | 2023 | ||||||
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $ | (44) | $ | 49 | |||
Deferred tax benefit on outside basis difference related to a planned disposition | 170 | — | |||||
Other tax matters | (18) | 21 | |||||
Adjustments to Income Taxes | $ | 108 | $ | 70 | |||
Adjustments to Other Income (Expense), Net | $ | 1 | $ | — | |||
Adjustments to Net Earnings | $ | (107) | $ | (70) |
Full Year 2024 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||
Reported | $ | 14,440 | $ | 7,685 | $ | 1,466 | $ | 3,689 | $ | (197) | $ | 499 | $ | 2,993 | 14.3 | % | $ | 7.76 | |||||||
Reported percent net sales | 63.9 | % | 34.0 | % | 6.5 | % | 16.3 | % | (0.9) % | nm | 13.2 | % | |||||||||||||
Acquisition and integration-related costs | |||||||||||||||||||||||||
Inventory stepped-up to fair value | 46 | — | — | 46 | — | 12 | 34 | 0.2 | 0.09 | ||||||||||||||||
Other acquisition and integration-related (a) | — | (107) | (1) | 108 | — | 23 | 85 | 0.2 | 0.22 | ||||||||||||||||
Amortization of purchased intangible assets | — | — | — | 623 | — | 128 | 495 | 1.0 | 1.28 | ||||||||||||||||
Structural optimization and other special charges (b) | 59 | (77) | (2) | 138 | 1 | 29 | 110 | 0.3 | 0.29 | ||||||||||||||||
Goodwill and other impairments (c) | — | — | — | 977 | — | 125 | 852 | (0.6) | 2.21 | ||||||||||||||||
Medical device regulations (d) | 9 | — | (49) | 58 | — | 14 | 44 | 0.1 | 0.11 | ||||||||||||||||
Recall-related matters (e) | 11 | (29) | — | 40 | — | 10 | 30 | 0.1 | 0.08 | ||||||||||||||||
Regulatory and legal matters (f) | — | (36) | — | 36 | — | 7 | 29 | 0.1 | 0.08 | ||||||||||||||||
Tax matters (g) | — | — | — | — | — | (28) | 28 | (0.9) | 0.07 | ||||||||||||||||
Adjusted | $ | 14,565 | $ | 7,436 | $ | 1,414 | $ | 5,715 | $ | (196) | ) | $ | 819 | $ | 4,700 | 14.8 | % | $ | 12.19 | ||||||
Adjusted percent net sales | 64.5 | % | 32.9 | % | 6.3 | % | 25.3 | % | (0.9) % | nm | 20.8 | % |
Full Year 2023 | Gross Profit | Selling, General & Administrative Expenses | Research, Development & Engineering Expenses | Operating Income | Other Income (Expense), Net | Income Taxes | Net Earnings | Effective Tax Rate | Diluted EPS | ||||||||||||||||
Reported | $ | 13,058 | $ | 7,111 | $ | 1,388 | $ | 3,888 | $ | (215 | ) | $ | 508 | $ | 3,165 | 13.8 | % | $ | 8.25 | ||||||
Reported percent net sales | 63.7 | % | 34.7 | % | 6.8 | % | 19.0 | % | (1.0) % | nm | 15.4 | % | |||||||||||||
Acquisition and integration-related costs | |||||||||||||||||||||||||
Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | ||||||||||||||||
Other acquisition and integration-related (a) | — | (20) | — | 20 | — | (25) | 45 | (0.8) | 0.12 | ||||||||||||||||
Amortization of purchased intangible assets | — | — | — | 635 | — | 132 | 503 | 1.2 | 1.31 | ||||||||||||||||
Structural optimization and other special charges (b) | 39 | (130) | (1) | 170 | — | 38 | 132 | 0.4 | 0.34 | ||||||||||||||||
Goodwill and other impairments (c) | — | — | — | 36 | — | 9 | 27 | 0.1 | 0.08 | ||||||||||||||||
Medical device regulations (d) | 2 | — | (94) | 96 | — | 22 | 74 | 0.2 | 0.19 | ||||||||||||||||
Recall-related matters (e) | — | (18) | — | 18 | — | 4 | 14 | — | 0.04 | ||||||||||||||||
Regulatory and legal matters (f) | — | (92) | — | 92 | — | 29 | 63 | 0.4 | 0.16 | ||||||||||||||||
Tax matters (g) | — | — | — | — | (8) | (51) | 43 | (1.2) | 0.11 | ||||||||||||||||
Adjusted | $ | 13,099 | $ | 6,851 | $ | 1,293 | $ | 4,955 | $ | (223) | $ | 666 | $ | 4,066 | 14.1 | % | $ | 10.60 | |||||||
Adjusted percent net sales | 63.9 | % | 33.4 | % | 6.3 | % | 24.2 | % | (1.1) % | nm | 19.8 | % |
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
2024 | 2023 | |||||
Termination of sales relationships | $ | 4 | $ | 5 | ||
Employee retention and workforce reductions | 22 | 6 | ||||
Changes in the fair value of contingent consideration | 8 | (1) | ||||
Manufacturing integration costs | 3 | 2 | ||||
Stock compensation payments upon a change in control | 22 | — | ||||
Other integration-related activities | 49 | 8 | ||||
Adjustments to Operating Income | $ | 108 | $ | 20 | ||
Other income taxes related to acquisition and integration-related costs | 23 | (25) | ||||
Adjustments to Income Taxes | $ | 23 | $ | (25) | ||
Adjustments to Net Earnings | $ | 85 | $ | 45 |
(b) Structural optimization and other special charges represent the costs associated with:
2024 | 2023 | ||||
Employee retention and workforce reductions | $ | 23 | $ | 69 | |
Closure/transfer of manufacturing and other facilities | 31 | 50 | |||
Product line exits | 37 | 22 | |||
Termination of sales relationships in certain countries | 8 | — | |||
Other charges | 39 | 29 | |||
Adjustments to Operating Income | $ | 138 | $ | 170 | |
Adjustments to Other Income (Expense), Net | $ | 1 | $ | — | |
Adjustments to Income Taxes | $ | 29 | $ | 38 | |
Adjustments to Net Earnings | $ | 110 | $ | 132 |
(c) Goodwill and other impairments represent the costs associated with:
2024 | 2023 | ||||
Goodwill impairments | $ | 456 | $ | — | |
Certain long-lived and intangible asset write-offs and impairments | 466 | 26 | |||
Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) | 55 | 10 | |||
Adjustments to Operating Income | $ | 977 | $ | 36 | |
Adjustments to Income Taxes | $ | 125 | $ | 9 | |
Adjustments to Net Earnings | $ | 852 | $ | 27 |
(d) 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.
(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.
(f) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
2024 | 2023 | ||||||
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $ | (185) | $ | (89) | |||
Certain tax audit settlements | (1) | 24 | |||||
Reversal of deferred income tax on undistributed earnings of foreign subsidiaries | — | — | |||||
Deferred tax benefit on outside basis difference related to a planned disposition | 170 | — | |||||
Other significant and discrete tax items | (12) | 14 | |||||
Adjustments to Income Taxes | $ | (28) | $ | (51) | |||
Benefits for certain tax audit settlements | — | (9) | |||||
Other tax related adjustments | — | 1 | |||||
Adjustments to Other Income (Expense), Net | $ | — | $ | (8) | |||
Adjustments to Net Earnings | $ | 28 | $ | 43 |
FAQ
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