Stryker reports second quarter 2024 operating results
Stryker (NYSE:SYK) reported strong Q2 2024 results with reported net sales increasing 8.5% to $5.4 billion and organic net sales growth of 9.0%. The company saw improvements in key financial metrics:
- Reported operating income margin: 19.4%
- Adjusted operating income margin: up 30 bps to 24.6%
- Reported EPS: up 10.9% to $2.14
- Adjusted EPS: up 10.6% to $2.81
Based on strong performance, Stryker raised its full-year 2024 outlook, now expecting organic net sales growth of 9.0% to 10.0% and adjusted EPS in the range of $11.90 to $12.10. The company cited sustained procedural volumes and healthy demand for capital products as drivers for the positive outlook.
Stryker (NYSE:SYK) ha riportato risultati solidi per il secondo trimestre del 2024, con vendite nette riportate in aumento dell'8,5% a 5,4 miliardi di dollari e crescita delle vendite nette organiche del 9,0%. L'azienda ha registrato miglioramenti nei principali indicatori finanziari:
- Margine di reddito operativo riportato: 19,4%
- Margine di reddito operativo rettificato: in aumento di 30 punti base al 24,6%
- EPS riportato: in aumento del 10,9% a 2,14 dollari
- EPS rettificato: in aumento del 10,6% a 2,81 dollari
Sulla base di risultati forti, Stryker ha alzato le previsioni per l'intero anno 2024, ora prevedendo una crescita delle vendite nette organiche tra il 9,0% e il 10,0% e EPS rettificato compreso tra 11,90 e 12,10 dollari. L'azienda ha citato volumi procedurali sostenuti e una domanda sana per i prodotti capitali come fattori che hanno contribuito a questa prospettiva positiva.
Stryker (NYSE:SYK) reportó sólidos resultados para el segundo trimestre de 2024, con ventas netas reportadas aumentando un 8.5% a $5.4 mil millones y crecimiento de ventas netas orgánicas del 9.0%. La compañía observó mejoras en métricas financieras clave:
- Margen de ingreso operativo reportado: 19.4%
- Margen de ingreso operativo ajustado: aumentado en 30 puntos básicos al 24.6%
- EPS reportado: aumento del 10.9% a $2.14
- EPS ajustado: aumento del 10.6% a $2.81
Basado en un sólido rendimiento, Stryker elevó su pronóstico para todo el año 2024, ahora esperando crecimiento de ventas netas orgánicas del 9.0% al 10.0% y EPS ajustado en el rango de $11.90 a $12.10. La compañía citó volúmenes procedimentales sostenidos y una demanda saludable de productos de capital como los impulsores de esta perspectiva positiva.
Stryker (NYSE:SYK)는 2024년 2분기 강력한 실적을 보고했으며, 보고된 순매출이 8.5% 증가하여 54억 달러에 도달했습니다와 유기적 순매출 성장률이 9.0%입니다. 이 회사는 주요 재무 지표에서 개선을 보였습니다:
- 보고된 운영 소득 마진: 19.4%
- 조정된 운영 소득 마진: 30bp 증가하여 24.6%
- 보고된 주당순이익(EPS): 10.9% 증가하여 $2.14
- 조정된 EPS: 10.6% 증가하여 $2.81
강력한 실적을 바탕으로 Stryker는 2024년 전체 연간 전망을 상향 조정했으며, 이제 유기적 순매출 성장이 9.0%에서 10.0% 사이와 조정된 EPS가 $11.90에서 $12.10 사이일 것으로 예상하고 있습니다. 이 회사는 긍정적인 전망의 원동력으로 지속적인 절차_volumes와 건강한 자본 제품에 대한 수요를 언급했습니다.
Stryker (NYSE:SYK) a annoncé des résultats solides pour le deuxième trimestre de 2024, avec des ventes nettes rapportées en hausse de 8,5 % pour atteindre 5,4 milliards de dollars et une croissance des ventes nettes organiques de 9,0 %. L’entreprise a observé des améliorations dans des indicateurs financiers clés :
- Marge de revenu opérationnel rapportée : 19,4 %
- Marge de revenu opérationnel ajustée : en hausse de 30 points de base à 24,6 %
- BPA rapporté : en hausse de 10,9 % pour atteindre 2,14 dollars
- BPA ajusté : en hausse de 10,6 % pour atteindre 2,81 dollars
Sur la base de ces performances solides, Stryker a relevé ses prévisions pour l’année 2024, s’attendant désormais à une croissance des ventes nettes organiques de 9,0 % à 10,0 % et à un BPA ajusté compris entre 11,90 et 12,10 dollars. L’entreprise a cité des volumes de procédures soutenus et une demande soutenue pour les produits d'investissement comme moteurs de cette perspective positive.
Stryker (NYSE:SYK) berichtete über starke Ergebnisse für das zweite Quartal 2024, mit einem Anstieg der berichteten Nettoumsätze um 8,5% auf 5,4 Milliarden USD und einem organischen Nettoumsatzwachstum von 9,0%. Das Unternehmen verzeichnete Verbesserungen in wichtigen Finanzkennzahlen:
- Berichtete operative Gewinnmarge: 19,4%
- Bereinigte operative Gewinnmarge: um 30 Basispunkte auf 24,6% gestiegen
- Berichteter Gewinn pro Aktie (EPS): um 10,9% auf 2,14 USD gestiegen
- Bereinigter EPS: um 10,6% auf 2,81 USD gestiegen
Aufgrund der starken Leistung hob Stryker die Prognosen für das Gesamtjahr 2024 an und erwartet nun ein organisches Nettoumsatzwachstum von 9,0% bis 10,0% sowie einen bereinigten EPS im Bereich von 11,90 bis 12,10 USD. Das Unternehmen nannte nachhaltige Verfahrensvolumina und eine gesunde Nachfrage nach Investitionsgütern als Faktoren für die positive Einschätzung.
- Reported net sales increased 8.5% to $5.4 billion
- Organic net sales grew 9.0%
- Adjusted operating income margin improved 30 bps to 24.6%
- Reported EPS increased 10.9% to $2.14
- Adjusted EPS rose 10.6% to $2.81
- Full-year 2024 organic net sales growth outlook raised to 9.0%-10.0%
- Adjusted EPS guidance for 2024 increased to $11.90-$12.10
- Potential negative impact of $0.10 to $0.15 on adjusted EPS due to unfavorable foreign exchange rates
Insights
Stryker's Q2 2024 results demonstrate strong performance across key financial metrics. The company reported an 8.5% increase in net sales to
The adjusted operating income margin expanded by 30 basis points to
Notably, both major segments - MedSurg and Neurotechnology and Orthopaedics and Spine - showed robust organic growth of
The company's updated 2024 outlook is particularly encouraging. Stryker now expects full-year organic net sales growth between
Overall, Stryker's Q2 results and improved outlook paint a picture of a company executing well in a favorable market environment, with potential for continued growth and margin expansion.
Stryker's Q2 2024 performance underscores the robust recovery in elective procedures and the strong demand for medical devices. The
The MedSurg and Neurotechnology segment's
In the Orthopaedics and Spine segment, the
Stryker's positive outlook for sustained procedural volumes and healthy demand for capital products is a strong indicator for the overall health of the healthcare sector. It suggests that hospitals and healthcare providers are financially stable and willing to invest in new equipment and technologies.
The company's commitment to margin expansion goals, coupled with excitement about product and M&A pipelines, indicates a focus on both organic growth and strategic acquisitions. This balanced approach could help Stryker maintain its competitive edge in the evolving medical device landscape.
Portage, Michigan, July 30, 2024 (GLOBE NEWSWIRE) -- Stryker (NYSE:SYK) reported operating results for the second quarter of 2024:
Second Quarter Results
- Reported net sales increased
8.5% to$5.4 billion - Organic net sales increased
9.0% - Reported operating income margin of
19.4% - Adjusted operating income margin(1) increased 30 bps to
24.6% - Reported EPS increased
10.9% to$2.14 - Adjusted EPS(1) increased
10.6% to$2.81
| Second Quarter Net Sales Growth Overview | ||||||||||||||
| Reported | Foreign Currency Exchange | Constant Currency | Acquisitions / Divestitures | Organic | ||||||||||
| MedSurg and Neurotechnology | 9.0 | % | (0.8) % | 9.8 | % | 0.1 | % | 9.7 | % | |||||
| Orthopaedics and Spine | 7.9 | (1.0) | 8.9 | 0.9 | 8.0 | |||||||||
| Total | 8.5 | % | (0.9) % | 9.4 | % | 0.4 | % | 9.0 | % | |||||
"We delivered another quarter of strong organic sales growth," said Kevin A. Lobo, Chair and CEO. "We remain committed to our margin expansion goals and are excited about our product and M&A pipelines."
Sales Analysis
Consolidated net sales of
MedSurg and Neurotechnology net sales of
Orthopaedics and Spine net sales of
Earnings Analysis
Reported net earnings of
2024 Outlook
Based on our year-to-date performance and our positive outlook related to sustained procedural volumes and a healthy demand for our capital products, we now expect full year 2024 organic net sales growth(2) to be in the range of
(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 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, July 30, 2024
As previously announced, we will host a conference call on Tuesday, July 30, 2024 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter ended June 30, 2024 and provide an operational update.
Please register for this conference call at: https://www.veracast.com/webcasts/stryker/events/SYK2Q24.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 factors include, but are not limited to: weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our products; geopolitical risks, including from international conflicts and elections in the United States and other countries, which could, among other things, lead to increased market volatility; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our 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 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 reimbursement levels from third-party payors; 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; 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; our ability to realize 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; and breaches or failures of our or our vendors' or customers' information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft. 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.
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, Orthopaedics and Spine 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 and Six Months June 30 | |||||||||||||||||||||
| (Unaudited - Millions of Dollars, Except Per Share Amounts) | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||||
| Three Months | Six Months | ||||||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
| Net sales | $ | 5,422 | $ | 4,996 | 8.5 | % | $ | 10,665 | $ | 9,774 | 9.1 | % | |||||||||
| Cost of sales | 2,006 | 1,815 | 10.5 | 3,916 | 3,577 | 9.5 | |||||||||||||||
| Gross profit | $ | 3,416 | $ | 3,181 | 7.4 | % | $ | 6,749 | $ | 6,197 | 8.9 | % | |||||||||
| % of sales | 63.0 | % | 63.7 | % | 63.3 | % | 63.4 | % | |||||||||||||
| Research, development and engineering expenses | 363 | 346 | 4.9 | 731 | 685 | 6.7 | |||||||||||||||
| Selling, general and administrative expenses | 1,847 | 1,709 | 8.1 | 3,687 | 3,490 | 5.6 | |||||||||||||||
| Amortization of intangible assets | 155 | 161 | (3.7) | 308 | 322 | (4.3) | |||||||||||||||
| Total operating expenses | $ | 2,365 | $ | 2,216 | 6.7 | % | $ | 4,726 | $ | 4,497 | 5.1 | % | |||||||||
| Operating income | $ | 1,051 | $ | 965 | 8.9 | % | $ | 2,023 | $ | 1,700 | 19.0 | % | |||||||||
| % of sales | 19.4 | % | 19.3 | % | 19.0 | % | 17.4 | % | |||||||||||||
| Other income (expense), net | (53) | (66) | (19.7) | (102) | (122) | (16.4) | |||||||||||||||
| Earnings before income taxes | $ | 998 | $ | 899 | 11.0 | % | $ | 1,921 | $ | 1,578 | 21.7 | % | |||||||||
| Income taxes | 173 | 161 | 7.5 | 308 | 248 | 24.2 | % | ||||||||||||||
| Net earnings | $ | 825 | $ | 738 | 11.8 | % | $ | 1,613 | $ | 1,330 | 21.3 | % | |||||||||
| Net earnings per share of common stock: | |||||||||||||||||||||
| Basic | $ | 2.17 | $ | 1.95 | 11.3 | % | $ | 4.24 | $ | 3.51 | 20.8 | % | |||||||||
| Diluted | $ | 2.14 | $ | 1.93 | 10.9 | % | $ | 4.19 | $ | 3.47 | 20.7 | % | |||||||||
| Weighted-average shares outstanding (in millions): | |||||||||||||||||||||
| Basic | 381.0 | 379.7 | 380.7 | 379.4 | |||||||||||||||||
| Diluted | 385.4 | 383.9 | 385.2 | 383.6 | |||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| June 30 | December 31 | ||||
| 2024 | 2023 | ||||
| Assets | |||||
| Cash and cash equivalents | $ | 1,874 | $ | 2,971 | |
| Marketable securities | 83 | 82 | |||
| Accounts receivable, net | 3,622 | 3,765 | |||
| Inventories | 5,044 | 4,843 | |||
| Prepaid expenses and other current assets | 1,022 | 857 | |||
| Total current assets | $ | 11,645 | $ | 12,518 | |
| Property, plant and equipment, net | 3,318 | 3,215 | |||
| Goodwill and other intangibles, net | 19,771 | 19,836 | |||
| Noncurrent deferred income tax assets | 1,606 | 1,670 | |||
| Other noncurrent assets | 2,790 | 2,673 | |||
| Total assets | $ | 39,130 | $ | 39,912 | |
| Liabilities and shareholders' equity | |||||
| Current liabilities | $ | 6,926 | $ | 7,921 | |
| Long-term debt, excluding current maturities | 10,127 | 10,901 | |||
| Income taxes | 350 | 567 | |||
| Other noncurrent liabilities | 1,965 | 1,930 | |||
| Shareholders' equity | 19,762 | 18,593 | |||
| Total liabilities and shareholders' equity | $ | 39,130 | $ | 39,912 | |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| Six Months | |||||||
| 2024 | 2023 | ||||||
| Operating activities | |||||||
| Net earnings | $ | 1,613 | $ | 1,330 | |||
| Depreciation | 210 | 194 | |||||
| Amortization of intangible assets | 308 | 322 | |||||
| Changes in operating assets, liabilities, income taxes payable and other, net | (1,294) | (713) | |||||
| Net cash provided by operating activities | $ | 837 | $ | 1,133 | |||
| Investing activities | |||||||
| Acquisitions, net of cash acquired | $ | (334) | $ | (390) | |||
| Purchases of property, plant and equipment | (319) | (282) | |||||
| Other investing, net | 128 | 7 | |||||
| Net cash used in investing activities | $ | (525) | $ | (665) | |||
| Financing activities | |||||||
| Borrowings (payments) of debt, net | $ | (600) | $ | (205) | |||
| Payments of dividends | (609) | (569) | |||||
| Other financing, net | (175) | (112) | |||||
| Net cash provided by (used in) financing activities | $ | (1,384) | $ | (886) | |||
| Effect of exchange rate changes on cash and cash equivalents | (25) | (25) | |||||
| Change in cash and cash equivalents | $ | (1,097) | $ | (443) | |||
| STRYKER CORPORATION |
| For the Three and Six Months June 30 |
| (Unaudited - Millions of Dollars) |
| SALES GROWTH ANALYSIS | |||||||||||||||||||||
| Three Months | Six Months | ||||||||||||||||||||
| Percentage Change | Percentage Change | ||||||||||||||||||||
| 2024 | 2023 | As Reported | Constant Currency | 2024 | 2023 | As Reported | Constant Currency | ||||||||||||||
| Geographic: | |||||||||||||||||||||
| United States | $ | 4,047 | $ | 3,711 | 9.1 | % | 9.1 | % | $ | 7,961 | $ | 7,223 | 10.2 | % | 10.2 | % | |||||
| International | 1,375 | 1,285 | 7.0 | 10.5 | 2,704 | 2,551 | 6.0 | 8.7 | |||||||||||||
| Total | $ | 5,422 | $ | 4,996 | 8.5 | % | 9.4 | % | $ | 10,665 | $ | 9,774 | 9.1 | % | 9.8 | % | |||||
| Segment: | |||||||||||||||||||||
| MedSurg and Neurotechnology | $ | 3,117 | $ | 2,860 | 9.0 | % | 9.8 | % | $ | 6,116 | $ | 5,550 | 10.2 | % | 10.8 | % | |||||
| Orthopaedics and Spine | 2,305 | 2,136 | 7.9 | 8.9 | 4,549 | 4,224 | 7.7 | 8.5 | |||||||||||||
| Total | $ | 5,422 | $ | 4,996 | 8.5 | % | 9.4 | % | $ | 10,665 | $ | 9,774 | 9.1 | % | 9.8 | % | |||||
| 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 | $ | 698 | $ | 622 | 12.3 | % | 12.9 | % | 12.3 | % | 12.4 | % | 15.4 | % | ||||
| Endoscopy | 768 | 713 | 7.6 | 8.3 | 8.2 | 5.3 | 9.0 | |||||||||||
| Medical | 908 | 841 | 8.0 | 8.4 | 11.9 | (8.7) | (6.5) | |||||||||||
| Neurovascular | 327 | 311 | 5.3 | 8.0 | 2.3 | 7.3 | 11.8 | |||||||||||
| Neuro Cranial | 416 | 373 | 11.6 | 12.2 | 10.6 | 16.2 | 19.9 | |||||||||||
| $ | 3,117 | $ | 2,860 | 9.0 | % | 9.8 | % | 10.3 | % | 4.9 | % | 8.3 | % | |||||
| Orthopaedics and Spine: | ||||||||||||||||||
| Knees | $ | 602 | $ | 562 | 7.1 | % | 8.0 | % | 6.6 | % | 8.2 | % | 11.7 | % | ||||
| Hips | 428 | 393 | 8.9 | 10.6 | 4.3 | 16.9 | 21.7 | |||||||||||
| Trauma and Extremities | 832 | 766 | 8.6 | 9.3 | 9.1 | 7.4 | 9.8 | |||||||||||
| Spine | 307 | 296 | 3.8 | 4.4 | 4.4 | 2.0 | 4.3 | |||||||||||
| Other | 136 | 119 | 14.3 | 16.4 | 15.4 | 11.7 | 18.9 | |||||||||||
| $ | 2,305 | $ | 2,136 | 7.9 | % | 8.9 | % | 7.3 | % | 9.4 | % | 12.9 | % | |||||
| Total | $ | 5,422 | $ | 4,996 | 8.5 | % | 9.4 | % | 9.1 | % | 7.0 | % | 10.5 | % | ||||
| Six Months | ||||||||||||||||||
| United States | International | |||||||||||||||||
| Percentage Change | ||||||||||||||||||
| 2024 | 2023 | As Reported | Constant Currency | As Reported | As Reported | Constant Currency | ||||||||||||
| MedSurg and Neurotechnology: | ||||||||||||||||||
| Instruments | $ | 1,365 | $ | 1,188 | 14.9 | % | 15.3 | % | 16.0 | % | 10.4 | % | 12.5 | % | ||||
| Endoscopy | 1,546 | 1,420 | 8.9 | 9.4 | 9.6 | 5.6 | 8.6 | |||||||||||
| Medical | 1,772 | 1,619 | 9.4 | 9.7 | 14.2 | (9.5) | (8.1) | |||||||||||
| Neurovascular | 637 | 595 | 7.1 | 9.6 | 2.6 | 10.2 | 14.5 | |||||||||||
| Neuro Cranial | 796 | 728 | 9.3 | 9.9 | 8.9 | 11.4 | 14.7 | |||||||||||
| $ | 6,116 | $ | 5,550 | 10.2 | % | 10.8 | % | 12.0 | % | 4.6 | % | 7.3 | % | |||||
| Orthopaedics and Spine: | ||||||||||||||||||
| Knees | $ | 1,190 | $ | 1,128 | 5.5 | % | 6.2 | % | 4.8 | % | 7.3 | % | 10.0 | % | ||||
| Hips | 821 | 768 | 7.0 | 8.4 | 5.5 | 9.6 | 13.5 | |||||||||||
| Trauma and Extremities | 1,662 | 1,535 | 8.3 | 8.6 | 9.7 | 4.5 | 5.9 | |||||||||||
| Spine | 607 | 580 | 4.6 | 5.0 | 4.1 | 6.0 | 7.6 | |||||||||||
| Other | 269 | 213 | 26.2 | 28.7 | 28.1 | 22.1 | 29.9 | |||||||||||
| $ | 4,549 | $ | 4,224 | 7.7 | % | 8.5 | % | 7.8 | % | 7.5 | % | 10.1 | % | |||||
| Total | $ | 10,665 | $ | 9,774 | 9.1 | % | 9.8 | % | 10.2 | % | 6.0 | % | 8.7 | % | ||||
Notes: The three months 2024 had the same number of selling days as 2023. The six months 2024 had one less selling day than 2023. Beginning in the first quarter 2024, a product line previously included in Instruments has been reclassified to Endoscopy to align with a change in our internal reporting structure. We have reflected this change in all historical periods presented.
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 rates 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. These adjustments are irregular in timing and may not be indicative of our past and future performance.
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 and Six Months June 30 | |||||||||||||||||||||||||
| (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 | $ | 3,416 | $ | 1,847 | $ | 363 | $ | 1,051 | $ | (53) | $ | 173 | $ | 825 | 17.3 | % | $ | 2.14 | |||||||
| Reported percent net sales | 63.0 | % | 34.1 | % | 6.7 | % | 19.4 | % | (1.0) % | nm | 15.2 | % | |||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||
| Inventory stepped-up to fair value | 9 | — | — | 9 | — | 2 | 7 | 0.1 | 0.02 | ||||||||||||||||
| Other acquisition and integration-related (a) | — | (14) | — | 14 | — | 2 | 12 | 0.1 | 0.03 | ||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 155 | — | 32 | 123 | 0.8 | 0.33 | ||||||||||||||||
| Structural optimization and other special charges (b) | 40 | (35) | — | 75 | — | 17 | 58 | 0.5 | 0.15 | ||||||||||||||||
| Medical device regulations (c) | 4 | — | (11) | 15 | — | 4 | 11 | 0.1 | 0.02 | ||||||||||||||||
| Recall-related matters (d) | 11 | (6) | — | 17 | — | 4 | 13 | 0.1 | 0.03 | ||||||||||||||||
| Regulatory and legal matters (e) | — | 2 | — | (2) | — | (1) | (1) | — | — | ||||||||||||||||
| Tax matters (f) | — | — | — | — | (1) | (38) | 37 | (3.8) | 0.09 | ||||||||||||||||
| Adjusted | $ | 3,480 | $ | 1,794 | $ | 352 | $ | 1,334 | $ | (54) | $ | 195 | $ | 1,085 | 15.2 | % | $ | 2.81 | |||||||
| Adjusted percent net sales | 64.2 | % | 33.1 | % | 6.5 | % | 24.6 | % | (1.0) % | nm | 20.0 | % | |||||||||||||
| 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 | $ | 3,181 | $ | 1,709 | $ | 346 | $ | 965 | $ | (66 | ) | $ | 161 | $ | 738 | 17.9 | % | $ | 1.93 | |||||||
| Reported percent net sales | 63.7 | % | 34.2 | % | 6.9 | % | 19.3 | % | (1.3) % | nm | 14.8 | % | ||||||||||||||
| Acquisition and integration-related costs: | ||||||||||||||||||||||||||
| Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | |||||||||||||||||
| Other acquisition and integration-related (a) | — | (2) | — | 2 | — | 2 | — | 0.1 | — | |||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 161 | — | 34 | 127 | 1.1 | 0.33 | |||||||||||||||||
| Structural optimization and other special charges (b) | 9 | (63) | — | 72 | — | 17 | 55 | 0.7 | 0.14 | |||||||||||||||||
| Medical device regulations (c) | — | — | (27) | 27 | — | 8 | 19 | 0.4 | 0.05 | |||||||||||||||||
| Recall-related matters (d) | — | (3) | — | 3 | — | 1 | 2 | — | 0.01 | |||||||||||||||||
| Regulatory and legal matters (e) | — | 14 | — | (14) | — | (3) | (11) | (0.1) | (0.03) | |||||||||||||||||
| Tax matters (f) | — | — | — | — | — | (46) | 46 | (4.9) | 0.11 | |||||||||||||||||
| Adjusted | $ | 3,190 | $ | 1,655 | $ | 319 | $ | 1,216 | $ | (66 | ) | $ | 174 | $ | 976 | 15.2 | % | $ | 2.54 | |||||||
| Adjusted percent net sales | 63.9 | % | 33.1 | % | 6.4 | % | 24.3 | % | (1.3) % | nm | 19.5 | % | ||||||||||||||
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
| Three Months | ||||||
| 2024 | 2023 | |||||
| Termination of sales relationships | $ | 2 | $ | — | ||
| Employee retention and workforce reductions | 4 | — | ||||
| Changes in the fair value of contingent consideration | 2 | (2) | ||||
| Manufacturing integration costs | 1 | — | ||||
| Other integration-related activities (e.g., deal costs and legal entity rationalization) | 5 | 4 | ||||
| Adjustments to Operating Income | $ | 14 | $ | 2 | ||
| Adjustments to Income Taxes | $ | 2 | $ | 2 | ||
| Adjustments to Net Earnings | $ | 12 | $ | — | ||
(b) Structural optimization and other special charges represent the costs associated with:
| Three Months | |||||
| 2024 | 2023 | ||||
| Employee retention and workforce reductions | $ | 3 | $ | 47 | |
| Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 10 | 12 | |||
| Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) | 15 | 6 | |||
| Certain long-lived and intangible asset write-offs and impairments | 7 | 2 | |||
| Termination of sales relationships in certain countries | 1 | — | |||
| Other charges | 39 | 5 | |||
| Adjustments to Operating Income | $ | 75 | $ | 72 | |
| Adjustments to Income Taxes | $ | 17 | $ | 17 | |
| Adjustments to Net Earnings | $ | 58 | $ | 55 | |
(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.
(d) 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.
(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 regulatory or other legal matters and the amount of favorable awards from settlements.
(f) 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 | $ | (47) | $ | (47) | |||
| Certain tax audit settlements | (2) | (4) | |||||
| Other tax matters | 11 | 5 | |||||
| Adjustments to Income Taxes | $ | (38) | $ | (46) | |||
| Benefits for certain tax audit settlements | (1) | — | |||||
| Adjustments to Other Income (Expense), Net | $ | (1) | $ | — | |||
| Adjustments to Net Earnings | $ | 37 | $ | 46 | |||
| Six 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 | $ | 6,749 | $ | 3,687 | $ | 731 | $ | 2,023 | $ | (102) | $ | 308 | $ | 1,613 | 16.0 | % | $ | 4.19 | ||||||||
| Reported percent net sales | 63.3 | % | 34.6 | % | 6.9 | % | 19.0 | % | (1.0) % | nm | 15.1 | % | ||||||||||||||
| Acquisition and integration-related costs: | ||||||||||||||||||||||||||
| Inventory stepped-up to fair value | 9 | — | — | 9 | — | 2 | 7 | 0.1 | 0.02 | |||||||||||||||||
| Other acquisition and integration-related (a) | — | (1) | — | 1 | — | 3 | (2) | 0.2 | (0.01) | |||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 308 | — | 64 | 244 | 1.1 | 0.64 | |||||||||||||||||
| Structural optimization and other special charges (b) | 43 | (46) | — | 89 | — | 20 | 69 | 0.4 | 0.18 | |||||||||||||||||
| Medical device regulations (c) | 5 | — | (23) | 28 | — | 7 | 21 | 0.1 | 0.05 | |||||||||||||||||
| Recall-related matters (d) | 11 | (11) | — | 22 | — | 5 | 17 | 0.1 | 0.04 | |||||||||||||||||
| Regulatory and legal matters (e) | — | — | — | — | — | — | — | — | — | |||||||||||||||||
| Tax matters (f) | — | — | — | — | (1) | (79) | 78 | (4.1) | 0.20 | |||||||||||||||||
| Adjusted | $ | 6,817 | $ | 3,629 | $ | 708 | $ | 2,480 | $ | (103) | $ | 330 | $ | 2,047 | 13.9 | % | $ | 5.31 | ||||||||
| Adjusted percent net sales | 63.9 | % | 34.0 | % | 6.6 | % | 23.3 | % | (1.0) % | nm | 19.2 | % | ||||||||||||||
| Six 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 | $ | 6,197 | $ | 3,490 | $ | 685 | $ | 1,700 | $ | (122) | $ | 248 | $ | 1,330 | 15.7 | % | $ | 3.47 | |||||||
| Reported percent net sales | 63.4 | % | 35.7 | % | 7.0 | % | 17.4 | % | (1.2) % | nm | 13.6 | % | |||||||||||||
| Acquisition and integration-related costs: | |||||||||||||||||||||||||
| Inventory stepped-up to fair value | — | — | — | — | — | — | — | — | — | ||||||||||||||||
| Other acquisition and integration-related (a) | — | (8) | — | 8 | — | 3 | 5 | 0.1 | 0.01 | ||||||||||||||||
| Amortization of purchased intangible assets | — | — | — | 322 | — | 68 | 254 | 1.4 | 0.66 | ||||||||||||||||
| Structural optimization and other special charges (b) | 11 | (103) | — | 114 | — | 25 | 89 | 0.6 | 0.23 | ||||||||||||||||
| Medical device regulations (c) | — | — | (55) | 55 | — | 13 | 42 | 0.3 | 0.11 | ||||||||||||||||
| Recall-related matters (d) | — | (3) | — | 3 | — | 1 | 2 | — | 0.01 | ||||||||||||||||
| Regulatory and legal matters (e) | — | (20) | — | 20 | — | 3 | 17 | — | 0.04 | ||||||||||||||||
| Tax matters (f) | — | — | — | — | (9) | (66) | 57 | (4.0) | 0.15 | ||||||||||||||||
| Adjusted | $ | 6,208 | $ | 3,356 | $ | 630 | $ | 2,222 | $ | (131) | $ | 295 | $ | 1,796 | 14.1 | % | $ | 4.68 | |||||||
| Adjusted percent net sales | 63.5 | % | 34.3 | % | 6.4 | % | 22.7 | % | (1.3) % | nm | 18.4 | % | |||||||||||||
nm - not meaningful
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:
| Six Months | |||||||
| 2024 | 2023 | ||||||
| Termination of sales relationships | $ | 3 | $ | — | |||
| Employee retention and workforce reductions | 4 | — | |||||
| Changes in the fair value of contingent consideration | (14) | (3) | |||||
| Manufacturing integration costs | 1 | 2 | |||||
| Other integration-related activities (e.g., deal costs and legal entity rationalization) | 7 | 9 | |||||
| Adjustments to Operating Income | $ | 1 | $ | 8 | |||
| Adjustments to Income Taxes | $ | 3 | $ | 3 | |||
| Adjustments to Net Earnings | $ | (2) | $ | 5 | |||
(b) Structural optimization and other special charges represent the costs associated with:
| Six Months | |||||
| 2024 | 2023 | ||||
| Employee retention and workforce reductions | $ | 2 | $ | 68 | |
| Closure/transfer of manufacturing and other facilities (e.g., site closure, contract termination and redundant employee costs) | 16 | 24 | |||
| Product line exits (e.g., inventory, long-lived asset and specifically-identified intangible asset write-offs) | 15 | 9 | |||
| Certain long-lived and intangible asset write-offs and impairments | 10 | 3 | |||
| Termination of sales relationships in certain countries | 1 | — | |||
| Other charges | 45 | 10 | |||
| Adjustments to Operating Income | $ | 89 | $ | 114 | |
| Adjustments to Income Taxes | $ | 20 | $ | 25 | |
| Adjustments to Net Earnings | $ | 69 | $ | 89 | |
(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.
(d) 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.
(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 regulatory or other legal matters and the amount of favorable awards from settlements.
(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:
| Six Months | |||||||
| 2024 | 2023 | ||||||
| Adjustments related to the transfer of certain intellectual properties between tax jurisdictions | $ | (94) | $ | (94 | ) | ||
| Certain tax audit settlements | (2) | 24 | |||||
| Other tax matters | 17 | 4 | |||||
| Adjustments to Income Taxes | $ | (79) | $ | (66 | ) | ||
| Benefits for certain tax audit settlements | (1) | (9 | ) | ||||
| Adjustments to Other Income (Expense), Net | $ | (1) | $ | (9 | ) | ||
| Adjustments to Net Earnings | $ | 78 | $ | 57 | |||
FAQ
What was Stryker's (SYK) organic net sales growth in Q2 2024?
How much did Stryker's (SYK) adjusted EPS increase in Q2 2024?
What is Stryker's (SYK) full-year 2024 organic net sales growth guidance?
What is Stryker's (SYK) adjusted EPS guidance for full-year 2024?
