Stryker(SYK) - 2025 Q3 - Quarterly Results

Financial Performance - Reported net sales increased 10.3% to $6.1 billion, with organic net sales growth of 9.5%[3] - Adjusted net earnings rose 11.4% to $1.2 billion, with adjusted earnings per diluted share increasing 11.1% to $3.19[5] - The company experienced a 3.0% increase in reported net earnings to $859 million for the quarter[5] - Net earnings for the nine months ended September 30, 2025, were $2,397 million, a decrease of 2.0% compared to $2,447 million in 2024[20] - Reported net earnings for the nine months of 2025 were $2,397 million, with an effective tax rate of 14.7% and diluted EPS of $6.20, compared to $2,447 million, 17.4%, and $6.35 in 2024[36] - Adjusted net earnings for the nine months of 2025 were $3,541 million, with an effective tax rate of 14.6% and diluted EPS of $9.16, compared to $3,154 million, 14.6%, and $8.18 in 2024[36] Sales Growth - MedSurg and Neurotechnology net sales reached $3.8 billion, up 14.4% in the quarter, while Orthopaedics net sales were $2.3 billion, increasing by 3.9%[4] - Total sales for the nine months in 2025 reached $17,945 million, an increase of 11.1% compared to $16,159 million in 2024[23] - The MedSurg and Neurotechnology segment reported a sales growth of 15.0% for the nine months, totaling $11,085 million, up from $9,636 million in 2024[23] - The Orthopaedics segment experienced a sales increase of 5.2% for the nine months, reaching $6,860 million compared to $6,523 million in 2024[23] - The company reported a 59.6% increase in Vascular sales for the three months ended September 30, 2025, totaling $525 million[25] - The company’s international sales for the nine months grew by 7.1%, reaching $4,380 million compared to $4,089 million in 2024[23] Guidance and Projections - The company raised its full-year 2025 guidance, expecting organic net sales growth of 9.8% to 10.2% and adjusted earnings per diluted share between $13.50 and $13.60[6] Profitability Metrics - Reported gross profit margin was 63.6%, while adjusted gross profit margin improved to 65.0%[5] - Operating income margin was reported at 18.7%, with adjusted operating income margin increasing by 90 basis points to 25.6%[7] - Gross profit margin for the nine months of 2025 was 63.7%, up from 63.5% in 2024[36] - The company reported $11,437 million in gross profit for the nine months of 2025, an increase from $10,266 million in 2024[36] Cash Flow and Investments - Net cash provided by operating activities increased to $2,901 million in 2025 from $2,311 million in 2024, representing a growth of 25.5%[20] - Cash used in investing activities was $4,561 million in 2025, significantly higher than $2,697 million in 2024, primarily due to acquisitions[20] - The total cash and cash equivalents decreased by $396 million in 2025, contrasting with an increase of $879 million in 2024[20] Assets and Liabilities - The total assets of the company as of September 30, 2025, were $47.1 billion, compared to $43.0 billion at the end of 2024[18] - Current liabilities stood at $7.4 billion, while long-term debt, excluding current maturities, was $14.8 billion[18] Special Charges and Adjustments - The company incurred acquisition-related costs of $61 million for inventory stepped-up to fair value in Q3 2025[32] - Total acquisition and integration-related costs for the nine months of 2025 amounted to $302 million, significantly higher than $49 million in 2024[36] - Structural optimization and other special charges for the nine months of 2025 were $93 million, slightly up from $92 million in 2024[38] - Goodwill and other impairments for the nine months of 2025 totaled $163 million, compared to $21 million in 2024[38] - The company reported structural optimization and special charges of $41 million in Q3 2025, compared to $22 million in Q3 2024[33] Tax Matters - The effective tax rate for Q3 2025 was 16.5%, a decrease from 20.0% in Q3 2024[32][33] - The company faced tax matters resulting in a $50 million adjustment in Q3 2025, compared to a $57 million adjustment in Q3 2024[33] - Other tax matters resulted in a benefit of $82 million for the nine months of 2025, compared to $7 million in 2024[40] - Adjustments related to income taxes for the nine months of 2025 were $(71) million, compared to $(136) million in 2024[40] Expense Management - The company reported a decrease in selling, general, and administrative expenses as a percentage of net sales from 34.5% in Q3 2024 to 33.8% in Q3 2025[32][33]