Stryker(US:SYK)2025-05-02 15:35Financial Performance - In Q1 2025, Stryker Corporation achieved sales growth of 11.9% compared to Q1 2024, with net sales reaching $5,866 million[78]. - Adjusted net earnings per diluted share increased by 13.6% to $2.84, while net earnings per diluted share decreased by 17.6% to $1.69[78][86]. - MedSurg and Neurotechnology segment sales grew by 13.4% to $3,511 million, while Orthopaedics segment sales increased by 9.7% to $2,355 million[87][92]. - Stryker's total net sales in constant currency increased by 12.8%, with a 9.4% increase attributed to unit volume growth[90]. - Total sales for the three months of 2025 were reported at $3,744 million, up from $3,333 million in 2024, indicating a growth in sales[111]. Operating Income and Expenses - Operating income for the three months of 2025 was $837 million, a decrease from $972 million in 2024, resulting in a percentage of net sales decline from 18.5% to 14.3%[103]. - Selling, general, and administrative expenses increased by 25.2% to $2,300 million, primarily due to higher acquisition-related costs[96]. - Research, development, and engineering expenses rose by 10.1% to $405 million, remaining stable at 6.9% of net sales[95]. - MedSurg and Neurotechnology operating income as a percentage of net sales increased to 27.6% in 2025 from 27.3% in 2024, driven by lower manufacturing costs and higher unit volumes[104]. - Orthopaedics operating income as a percentage of net sales increased to 27.2% in 2025 from 26.2% in 2024, primarily due to higher unit volumes and lower manufacturing costs[99]. Cash Flow and Liquidity - Cash provided by operating activities increased to $250 million in Q1 2025 from $204 million in Q1 2024, primarily due to higher net earnings[117]. - Cash used in investing activities surged to $4,136 million in Q1 2025 compared to $408 million in Q1 2024, driven by the acquisition of Inari and capital expenditures[118]. - Cash provided by financing activities was $2,534 million in Q1 2025, significantly up from cash used of $418 million in Q1 2024, mainly due to proceeds from senior unsecured notes[119]. - Total liquidity, including cash, cash equivalents, short-term investments, and marketable securities, decreased to $2,409 million as of March 31, 2025, from $4,493 million at the end of 2024[120]. - Current assets exceeded current liabilities by $5,093 million as of March 31, 2025, down from $7,231 million at the end of 2024[120]. Acquisitions and Investments - The acquisition of Inari was completed in Q1 2025 for a total consideration of $4,745 million[79]. - The company maintained strong investment-grade ratings, facilitating potential refinancing of debt as needed[121]. Tax and Impairments - The effective tax rates were 14.4% in 2025 and 14.6% in 2024, reflecting lower effective income tax rates from European operations[101]. - Goodwill and other impairments increased to $35 million in 2025 from $3 million in 2024[102]. - Adjustments to net earnings included a charge of $19 million related to tax matters in Q1 2025, compared to a charge of $41 million in Q1 2024[115]. - Goodwill and other impairments amounted to $34 million in Q1 2025, up from $3 million in Q1 2024[113]. - The company anticipates future tax law changes could increase tax expenses in upcoming periods due to new regulations being enacted in various countries[104]. Macroeconomic Environment - The overall macroeconomic environment, including new tariffs, poses risks that could impact Stryker's business and results of operations[81]. - The percentage of cash and cash equivalents held outside the United States increased to 29% as of March 31, 2025, from 20% at the end of 2024[121].