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Stryker 4Q income falls on $133M recall charge

Stryker 4th-quarter net income falls as company takes charge related to hip device recall

Associated Press

KALAMAZOO, Mich. (AP) -- Medical device maker Stryker Corp. said Wednesday its net income sank 33 percent in the fourth quarter as it took a $133 million charge related to a recall of hip implant devices earlier in the year.

Stryker recalled its Rejuvenate and ABG III products in late June and stopped worldwide distribution of the products. The company cited concerns about fretting and corrosion, saying they could cause tissue reaction and pain in patients. Stryker said it plans to reimburse patients for the costs of testing and treatment related to the problem, which could include replacement surgeries.

The company said its net income fell to $270 million, or 71 cents per share, from $401 million, or $1.05 per share. Excluding one-time items Stryker said its income totaled $1.14 per share in the latest quarter, which ended Dec. 31.

Revenue rose 6 percent, to $2.34 billion from $2.22 billion.

Analysts surveyed by FactSet forecast quarterly earnings per share of $1.12 on revenue of $2.31 billion.

Stryker gave a preliminary fourth-quarter sales report on Jan. 9, and its results matched those estimates. The company said revenue from reconstructive products grew 7 percent to $1.05 billion, while sales at its MedSurg equipment unit climbed 2 percent to $877 million and revenue from neurotechnology and spine products increased 10 percent to $414 million.

Stryker reiterated that it expects to earn between $4.25 and $4.40 per share in 2013. Analysts expect $4.31 per share, on average.

Shares of Stryker rose 16 cents to $61.87 during regular trading, then added 8 cents to $61.95 in after-hours trading.

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