Stryker Corp Earnings: Streak of Four Straight Profit Declines Snapped

S&P 500 (NYSE:SPY) component Stryker Corporation (NYSE:SYK) reported its results for the fourth quarter. Stryker is a medical technology firm that produces a range of products in medical implants, surgical technologies and emergency medical equipment.

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Stryker Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Stryker Corporation rose to $401 million ($1.05 per share) vs. $295 million (74 cents per share) in the same quarter a year earlier. This marks a rise of 35.9% from the year earlier quarter.

Revenue: Rose 11% to $2.21 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: SYK reported adjusted net income of $1.02 per share. By that measure, the company fell in line with the mean estimate of $1.02 per share. Analysts were expecting revenue of $2.22 billion.

Quoting Management: “Despite the challenging economic environment, our results for 2011 underscore the inherent strength afforded by our balanced diversification. We have built on the breadth of our sales footprint with the addition of several targeted acquisitions which further expand our product offering in the medical technology market,” said Stephen P. MacMillan, Chairman, President and Chief Executive Officer.

Key Stats:

Last quarter’s profit increase breaks a streak of four consecutive quarters of year-over-year profit drops. In the third quarter, net income fell 3.2% from the year earlier, while the figure fell 3.1% in the second quarter, 4.4% in the first quarter and 3.6% in the fourth quarter of the last fiscal year.

Gross margin shrank 2.1 percentage points to 66.6%. The contraction appeared to be driven by increased costs, which rose 18.6% from the year earlier quarter while revenue rose 11%.

Revenue has risen the past four quarters. Revenue increased 14.9% to $2.03 billion in the third quarter. The figure rose 16.3% in the second quarter from the year earlier and climbed 12% in the first quarter from the year-ago quarter.

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of 91 cents versus a mean estimate of net income of 89 cents per share.

Looking Forward: The average estimate for the first quarter of the next fiscal year is steady at 99 cents a share. For the fiscal year, the average estimate has been unchanged at $3.73 a share.

Competitors to Watch: Zimmer Holdings, Inc. (NYSE:ZMH), Exactech, Inc. (NASDAQ:EXAC), Smith & Nephew plc (NYSE:SNN), Wright Medical Group, Inc. (NASDAQ:WMGI), Tornier N.V. (NASDAQ:TRNX), CONMED Corporation (NASDAQ:CNMD), ArthroCare Corporation (NASDAQ:ARTC), Medtronic, Inc. (NYSE:MDT), NuVasive, Inc. (NASDAQ:NUVA), and Alphatec Holdings, Inc. (NASDAQ:ATEC).

Stock Performance: Shares of SYK were up 0.3% from the previous close.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com