NEW YORK (Reuters) - Stryker Corp <SYK.N>, which said this week it was recalling some artificial hip products, reported on Wednesday a 21 percent jump in fourth-quarter profit on double-digit growth in sales of orthopedic implants and medical and surgical equipment.
By Bill Berkrot
NEW YORK (Reuters) - Stryker Corp <SYK.N>, which said this week it was recalling some artificial hip products, reported on Wednesday a 21 percent jump in fourth-quarter profit on double-digit growth in sales of orthopedic implants and medical and surgical equipment.
The orthopedic device maker posted a net profit of $276.1 million, or 66 cents per share, compared with a profit of $227.9 million, or 55 cents per share, a year earlier.
That matched the average forecast of analysts, according to Reuters Estimates.
!ADVERTISEMENT!The company, based in Kalamazoo, Michigan, said it remained optimistic about continued growth in 2008 "despite the potential for continued pricing pressure in certain markets." Volume growth in Japan was offset by price cuts, it said.
Stryker forecast a 20 percent rise in adjusted 2008 earnings from continuing operations to about $2.88 per share, matching expectations, according to Reuters Estimates.
"It was a good quarter," said Jeffrey Johnson, an analyst at Robert W. Baird. "The outlook relieves a little concern about how much the manufacturing issues and Trident recall are likely to weigh on 2008. Twenty percent growth is pretty much what you look for from Stryker."
QUALITY ISSUES
Earlier this week, Stryker said it was recalling some Trident hip implant components made at its Cork, Ireland plant because they failed to meet company manufacturing standards.
In addition to the problems at the Cork plant, Stryker received a separate warning letter from the Food and Drug Administration in November regarding quality issues in manufacturing at its Mahwah, New Jersey facility.
"We have work to do to get our quality and compliance systems to where the FDA and ourselves would like them to be," CEO Stephen MacMillan told analysts and investors on a conference call.
"We're taking this very, very seriously. We've got to raise our game and we are incredibly focused here," MacMillan said.
He said 2008 bonuses for all senior executives and division presidents were being linked to getting resolving problems. "We're putting our money where our mouth is," MacMillan said.
Eliminating the warnings are contingent on satisfactory inspections of the two plants by the FDA.
The company said it was unsure when those inspections would happen but would strive to have them completed in the first half of this year.
Sales for the fourth quarter rose 18.4 percent to $1.66 billion, spurred by strong U.S. demand and the weak dollar.
It marked the seventh consecutive year of double-digit sales growth, and quarterly sales beat Wall Street expectations of $1.60 billion.
Global orthopedic implant sales, including hip, knee and spinal products, rose 16.5 percent to $971.5 million, while sales of the MedSurg unit jumped 21.2 percent to $686.6 million.
All the major product lines had double-digit growth in the quarter, including a 29 percent jump in U.S. spine product sales. U.S. hip products rose 10 percent, achieving double digit growth for first time in 13 quarters.
(Editing by Richard Chang and Ted Kerr)
