) recently reported the successful conclusion of its voluntary
offer to purchase Trauson Holdings Company Limited. Based in
China, Trauson's offerings include trauma-related products.
The acquisition will enable Stryker to grow market share in
the value-oriented orthopedic segment in developing nations. The
deal is not expected to impact Stryker's earnings per share for
One of the driving factors behind Stryker's sales growth is
the on-going turnaround in the company's core Reconstructive
business, which may further improve going forward. Revenues from
Stryker's core Reconstructive unit (which offers replacement hip,
knees and extremities products) increased 6.7% (or 7.4% in
constant currency) to $1,046 million in the latest quarter. This
reflects a marked acceleration from the 1.1% growth achieved in
the previous quarter. It also implies improving reconstructive
market fundamentals. Besides, U.S. Reconstructive sales jumped
13.9% year over year in the quarter.
Stryker, with a market-cap of $24.7 billion, is one of the
world's largest medical device manufacturers operating in the
global orthopedic market. The company's well-diversified product
portfolio, expanding foothold in emerging markets along with
acquisitions are expected to drive future growth.
Moreover, the company remains committed to delivering
incremental returns to investors, as reflected in the recent hike
in dividend and sizeable share repurchase program.
However, Stryker faces several challenges, which include
continued soft international sales and tight hospital capital
budgets. Moreover, despite the recent stability in the domestic
market, it remains challenged by the prevailing austerity
measures in Europe.
Stryker carries a Zacks Rank #3 (Hold). Medical products
companies, such as
), which carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2
(Buy), respectively, are expected to do well.
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