Stryker Corporation (NYSE:SYK) Q1 2015 Earnings Conference Call - Final Transcript

Apr 21, 2016 • 04:30 pm ET

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Stryker Corporation (NYSE:SYK) Q1 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to Stryker's First Quarter 2015 Earnings Conference Call. My name is Lakiba, and I will be your operator for today's call. [Operator Instructions]

Before we begin, I would like to remind you that the discussions during the conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. Also the discussions will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed today with the SEC.

I will now turn the call over to Mr. Kevin Lobo, Chairman and Chief Executive Officer. You may proceed, sir.

Executive
Kevin A. Lobo

Good afternoon, everyone, and welcome to Stryker's first quarter 2015 earnings call.

Joining me today are Bill Jellison, our CFO; and Katherine Owen, Vice President of Strategy and Investor Relations. Following my opening comments, Katherine will provide several updates, including Mako, Bill will then offer details on our quarterly results, before turning to questions and answers.

Our first quarter results continue to reflect the strength of our sales and marketing teams, our diversified businesses and the payoff we are realizing from our investments in innovation. We had another strong quarter of organic sales growth of nearly 6% and EPS topped a high-end of our projected range for the quarter.

Trauma and extremities, sports medicine, interventional spine and our neurotechnology franchises all continued their momentum from last year with excellent growth. Our medical business also had an outstanding quarter, marking three successive quarters of stellar performance. And our US hip business helped to fuel the strength in orthopedics. We are pleased with the continued progress on Mako, which was a highlight of the recent American Academy of Orthopedic Surgeons Meeting. And we continue to have a high level of conviction regarding the long-term potential for robotics in orthopedics.

We are encouraged with launch of our Transatlantic Operating Model, as Europe posted another good quarter of growth and with strength in divisional leadership is set up for accelerated gains in the years ahead. As a reminder, we have used some of the benefits of our lower tax rate to invest in Europe SG&A.

Growth within the emerging markets was solid, again, as was our performance in Australia. Like any quarter, we had some challenges, including US supply disruptions, which adversely impacted revenue for both Instruments and Mako implants. The Mako issues will be resolved in Q2, while the Instruments situation will linger into Q3.

Despite these challenges, both businesses managed to post positive growth in the quarter. In both cases, we see delayed sales and no material loss of revenue for the full year. Japan is on an improving trajectory, and we expect this trend to continue as we move through the year. Growth from our recent acquisitions was also modestly below our expectation in the first quarter, but our teams are excited about the future of these