Stryker Corp (NYSE:SYK), a global leader in medical technologies, stock fell 1.56% (As on January 29, 11:22:38 AM UTC-4, Source: Google Finance) after the company announced today a definitive agreement to sell its U.S. spinal implants business to Viscogliosi Brothers, LLC, a family-owned investment firm specializing in the neuro-musculoskeletal space, to create a newly formed company called VB Spine, LLC. After closing, VB Spine will become a strategic partner to Stryker with exclusive access to Mako Spine and Copilot for use with VB Spine’s implants in spine procedures. The transaction is expected to close in the U.S. in the first half of 2025, subject to customary closing conditions. The company also disclosed the appointment of a new chief financial officer. Preston Wells, finance chief at its orthopaedics unit, will replace incumbent Glenn Boehnlein, effective April 1.
Meanwhile, SYK beat Wall Street estimates for fourth-quarter profit and forecast 2025 earnings largely above expectations, fueled by strong demand for its medical and surgical devices. Stryker forecast adjusted per-share profit for 2025 to be in the range of $13.45 to $13.70, the midpoint of which was above analysts’ average estimate of $13.51, according to data compiled by LSEG. Sales at Stryker’s medical surgery and neurotechnology unit climbed 10.6% to $3.89 billion and at its orthopedics segment they rose 10.8% to $2.55 billion. Earlier this month, the Michigan-based company signed a $4.9 billion deal to buy Inari Medical to expand its portfolio of products to treat vascular diseases.
SYK in the fourth quarter of FY 24 has reported the adjusted earnings per share of $4.01, beating the analysts’ estimates for the adjusted earnings per share of $3.87. The company had reported the adjusted revenue growth of 10.7 percent to $6.44 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $6.36 billion. Organic net sales increased 10.2% in the quarter and full year including 9.1% from increased unit volume and 1.1% from higher prices. Adjusted net earnings of $1.5 billion and $4.7 billion increased 16.6% and 15.6% in the quarter and full year.
Subsequent to the annual goodwill impairment test management committed to a plan to sell certain assets associated with the Spinal Implant business. Such assets were classified as held for sale beginning on November 1, 2024 which resulted in an additional goodwill impairment of $183 million and a $362 million impairment charge due to the carrying value of the assets held for sale exceeding the fair value less cost to sell.