Stryker(US:SYK)2024-05-01 15:52Financial Performance - Stryker Corporation achieved sales growth of 9.7% in Q1 2024, with net sales reaching $5,243 million compared to $4,778 million in Q1 2023[66] - Adjusted net earnings per diluted share increased by 16.8% to $2.50, with adjusted net earnings totaling $962 million[66] - The operating income margin improved to 18.5%, up from 15.4% in the previous year, with operating income of $972 million[80] - Net earnings increased by 33.1% to $788 million, compared to $592 million in Q1 2023[68] - Net earnings increased to $788 million or $2.05 per diluted share in Q1 2024, up from $592 million or $1.54 per diluted share in Q1 2023, representing a 33% increase in net earnings[85] - Adjusted net earnings for Q1 2024 were $962 million, with an adjusted diluted EPS of $2.50, compared to $820 million and $2.14 in Q1 2023, indicating a 17% increase in adjusted net earnings[92] - The company reported adjusted operating income of $1,146 million in Q1 2024, which is 21.9% of net sales, compared to 15.4% in Q1 2023[92] Sales Growth by Segment - MedSurg and Neurotechnology net sales grew by 11.5% to $2,999 million, while Orthopaedics and Spine net sales increased by 7.5% to $2,244 million[69] Expenses and Costs - Research, development, and engineering expenses rose by 8.6% to $368 million, maintaining a consistent percentage of net sales at 7.0%[76] - Selling, general and administrative expenses increased by 3.3% to $1,840 million, decreasing as a percentage of net sales from 37.3% to 35.1%[78] - The company incurred acquisition and integration-related costs of $13 million in Q1 2024, impacting adjusted net earnings[92] - Structural optimization and other special charges amounted to $14 million in Q1 2024, affecting operating income and net earnings[92] Profitability Metrics - Gross profit as a percentage of net sales increased to 63.6% from 63.1%, primarily due to favorable volumes[74] - Total reported gross profit for Q1 2024 was $3,333 million, representing 63.6% of net sales, compared to $3,016 million or 63.1% in Q1 2023[92] Cash Flow and Liquidity - Cash provided by operating activities decreased to $204 million in Q1 2024 from $445 million in Q1 2023, primarily due to timing of payments and collections in working capital accounts[97] - Cash used in investing activities increased to $408 million in Q1 2024 from $132 million in Q1 2023, which included cash paid for the SERF acquisition[98] - Cash used in financing activities was $418 million in Q1 2024, primarily driven by dividend payments of $304 million and cash paid for taxes on withheld shares of $113 million[99] - Cash, cash equivalents, and marketable securities decreased to $2,407 million as of March 31, 2024, from $3,053 million as of December 31, 2023[100] - Current assets exceeded current liabilities by $4,937 million on March 31, 2024, compared to $4,597 million on December 31, 2023[100] - Approximately 26% of cash, cash equivalents, and marketable securities were held outside the United States as of March 31, 2024, compared to 25% on December 31, 2023[101] Acquisitions - The company acquired SERF for $246 million, enhancing its Joint Replacement business within Orthopaedics and Spine[67] Taxation - The effective tax rates were 14.6% in Q1 2024 and 12.8% in Q1 2023, reflecting lower effective income tax rates due to European operations and discrete tax items[84] - The company anticipates that new tax laws, including a global corporate minimum tax rate of 15%, could increase tax expenses in future periods[84] Forward-Looking Statements - The company anticipates continued inflationary pressures and macroeconomic challenges impacting customer orders and capital product deal mix[64] - The report contains forward-looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from expectations[106] Accounting Policies - No changes were made to critical accounting policies and estimates from those disclosed in the Annual Report on Form 10-K for 2023[102] - The company does not have guarantees or off-balance sheet financing arrangements that could materially impact financial condition or liquidity[104] Financial Reporting - The company uses non-GAAP financial measures to provide meaningful insights into financial results, including percentage sales growth in constant currency and percentage organic sales growth[87] - Dollar amounts are reported in millions, except per share amounts or as otherwise specified[107]