Stryker reports 2024 operating results and 2025 outlook

Stryker (NYSE:SYK) reported operating results for the fourth quarter and full year of 2024:

Fourth Quarter ResultsReported 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 ResultsReported 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 $6.4 billion and $22.6 billion increased 10.7% in the quarter, 11.2% in constant currency, and increased 10.2% in the full year, 10.7% in constant currency. Organic net sales increased 10.2% in the quarter and full year including 9.1% from increased unit volume and 1.1% from higher prices.

MedSurg and Neurotechnology net sales of $3.9 billion and $13.5 billion increased 10.6% in the quarter, 11.1% in constant currency, and increased 11.1% in the full year, 11.6% in constant currency. Organic net sales increased 10.1% and 11.2% in the quarter and full year including 8.5% and 9.5% from increased unit volume and 1.6% and 1.7% from higher prices.

Orthopaedics net sales of $2.5 billion and $9.1 billion increased 10.8% in the quarter, 11.3% in constant currency, and increased 8.9% in the full year, 9.4% in constant currency. Organic net sales increased 10.2% and 8.7% in the quarter and full year including 9.9% and 8.7% from increased unit volume and 0.3% from higher prices in the quarter.

Earnings Analysis

Reported net earnings of $0.5 billion and $3.0 billion decreased 52.2% in the quarter and decreased 5.4% in the full year. Reported net earnings per diluted share of $1.41 and $7.76 decreased 52.7% in the quarter and decreased 5.9% in the full year. Reported gross profit margin and reported operating income margin were 64.9% and 9.0% in the quarter and 63.9% and 16.3% in the full year. Reported net earnings includes non-cash charges for goodwill and other impairments of $818 million related to the Spine business during the fourth quarter. We conduct our annual goodwill impairment tests during the fourth quarter and recorded a goodwill impairment charge of $273 million for the Spine reporting unit which was primarily driven by a decrease in future product demand due to the competitive environment and an increase in the Spine reporting unit’s weighted average cost of capital. Subsequent to the annual goodwill impairment test management committed to a plan to sell certain assets associated with the Spinal Implant business. Such assets were classified as held for sale beginning on November 1, 2024 which resulted in an additional goodwill impairment of $183 million and a $362 million impairment charge due to the carrying value of the assets held for sale exceeding the fair value less cost to sell. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, structural optimization and other special charges, goodwill and other impairments, costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin(1) was 65.3% and 64.5% in the quarter and full year, and adjusted operating income margin(1) was 29.2% and 25.3% in the quarter and full year. Adjusted net earnings(1) of $1.5 billion and $4.7 billion increased 16.6% and 15.6% in the quarter and full year. Adjusted net earnings per diluted share(1) of $4.01 and $12.19 increased 15.9% and 15.0% in the quarter and full year.

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 8.0% to 9.0% for 2025 and expect adjusted net earnings per diluted share(2) to be in the range of $13.45 to $13.70. Our guidance reflects our expectation that the full year impact of price on sales will be modestly favorable and that if foreign exchange rates hold near current levels, full year net sales will be unfavorably impacted by approximately 1% and adjusted net earnings per diluted share(2) will be negatively impacted by approximately $0.10 to $0.15.

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 $590 million of sales in the 2025 stub period on a constant currency basis and have dilutive impacts on adjusted operating income margin(2) of 0 to 20 basis points and $0.20 to $0.30 on adjusted net earnings per diluted share(2).

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).

https://www.morningstar.com/news/globe-newswire/9349054/stryker-reports-2024-operating-results-and-2025-outlook