Stryker: Hip device recalls could cost up to $390M
Stryker ($SYK) is expecting to fork over between $190 million to $390 million when all's said and done with its Rejuvenate and ABG II hip device recalls, but the company still managed 4.2% sales growth for 2012, and CEO Kevin Lobo says the devicemaker is expecting similar success in 2013.
The recalls, announced in June, have racked up a $174 million tab for Stryker, and the company can't be sure what the final price tag will be until it knows the cost of patient testing, revision surgeries and settlements.
However, Stryker still managed $2.3 billion in fourth-quarter sales, good for a 5.5% jump over 2011. The solid showing is thanks largely to a 6.7% increase in the reconstructive unit and a 9.7% revenue hike in the neurotechnology and spine business, the company reported.
Lobo, who took the reins in October, said the solid performance is a testament to Stryker's efforts to generate value in a tough market, cutting costs and rolling out new devices. "This reflects the commitment of our global teams and strength of our diverse sales footprint," Lobo said in a statement.
For 2013, the company expects revenue growth between 3% and 5.5%, and while Stryker expects to cough up $100 million to the medical device tax this year, it still predicts earnings per share in the range of $4.25 to $4.40.
- read Stryker's statement