STRYKER CORP Quarterly Report for Q1 Ended Mar 31, 2020

Summary

Stryker Corporation reported its first quarter 2020 results, demonstrating resilience despite the onset of the COVID-19 pandemic. Net sales grew 2.0% year-over-year to $3.59 billion, with a 2.9% increase in constant currency. Net earnings rose 19.7% to $493 million, translating to diluted earnings per share (EPS) of $1.30, a 19.3% increase from the prior year. The company managed operational expenses effectively, with selling, general, and administrative expenses decreasing 5.2%, contributing to an operating income increase of 20.3%. Despite the positive top-line growth and earnings improvement, the company noted significant impacts from the pandemic, particularly in March 2020, which led to a substantial decrease in elective medical procedures. This is expected to continue affecting results. Stryker also provided an update on its financial position, including amending its primary credit facility to increase the leverage ratio and securing a new 364-day revolving credit facility, indicating proactive measures to maintain financial flexibility.

Key Highlights

• 1Net sales increased by 2.0% to $3.59 billion in Q1 2020, compared to $3.52 billion in Q1 2019.
• 2Diluted earnings per share (EPS) rose by 19.3% to $1.30 from $1.09 in the prior year.
• 3Operating income saw a significant increase of 20.3% to $635 million.
• 4The company experienced a 5.2% decrease in selling, general, and administrative expenses.
• 5Despite global disruptions from COVID-19, the company's Orthopaedics segment sales were largely flat, while MedSurg and Neurotechnology and Spine segments showed growth.
• 6Stryker proactively amended its credit facility and secured a new 364-day revolving credit facility to ensure financial flexibility.
• 7The company anticipates continued negative impacts from COVID-19 due to the deferral of elective medical procedures.

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