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Stryker also reported that it will incur a restructuring charge ofapproximately $20 million (net of income tax benefit) in the fourth quarter,which will reduce diluted net earnings per share by approximately $0.05. Therestructuring charge primarily relates to the decision to simplify thestructure of the Company's Japanese distribution business with the intentionof streamlining the supply chain. Additionally, the restructuring chargereflects Stryker's decision to substantially reduce its development effortsassociated with the 2006 acquisition of Sightline Technologies, Ltd.
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As a result of the expected MedSurg Equipment sales shortfall in thefourth quarter and the impact of the restructuring charge, Stryker now expects2008 diluted net earnings per share to be in the range of $2.77 to $2.79. Thisrepresents an increase of 14% when compared to 2007 diluted net earnings pershare of $2.44 which included earnings related to the sale and operations ofour discontinued Physiotherapy Associates business. Excluding the impact ofthe fourth quarter 2008 restructuring charge, adjusted diluted net earningsper share for 2008 are expected to be in the range of $2.82 to $2.84, anincrease of 18% compared to adjusted diluted net earnings per share fromcontinuing operations of $2.40 in 2007.
"While our Company has historically felt little impact from recessions,the current pressures on hospital capital expenditures have had a significantadverse affect on our business in this quarter, which is typically thestrongest for capital purchases," commented Stephen P. MacMillan, Presidentand Chief Executive Officer. "Despite the changes to our 2008 outlook, westill expect to be one of the few Fortune 500 companies to have delivered anEPS gain of 18% against the backdrop of this difficult economy. Although thisis short of our historical 20% goal, we are achieving strong growth while alsomaking significant investments in compliance activities. With respect to ouroutlook for 2009, we will provide guidance as it relates to sales growth andearnings per share in early January at which point we will have greaterclarity regarding 2008 results and hospital capital budgets. We are committedto making the necessary investments to drive sales and earnings growth overthe long term while remaining very focused on tight cost controls during thistough environment."
Stryker Corporation is one of the world's leading medical technologycompanies with the most broadly based range of products in orthopaedics and asignificant presence in other medical specialties. Stryker works withrespected medical professionals to help people lead more active and moresatisfying lives. The Company's products include implants used in jointreplacement, trauma, craniomaxillofacial and spinal surgeries; biologics;surgical, neurologic, ear, nose & throat and interventional pain equipment;endoscopic, surgical navigation, communications and digital imaging systems;as well as patient handling and emergency medical equipment. For moreinformation about Stryker, please visit www.stryker.com.
SOURCE Stryker Corporation
