Orthopedic-device maker Stryker, Kalamazoo, Mich., reported a 3% drop in profits during the first quarter of 2009 compared with the year-ago period, according to a news release.
The company also revealed that its future earnings could be hurt by a proposed income tax adjustment that the Internal Revenue Service has indicated it plans to make to three years worth of returns filed between 2003 and 2005. The proposed adjustments are related to cost-sharing arrangements that Stryker has with two of its offshore divisions in Ireland.
Stryker attributed its decreased earnings to a falloff in medical-surgical equipment purchases and a slowing of elective procedures using orthopedic implants, both the result of a weakening global economy, company officials said. As a result, the company now projects that its 2009 diluted net earnings per share will be off by roughly 4%.
Profits for the quarter ended March 31 were $281 million compared with $291 million during the year-ago period. Strykers net sales also were down 2%, from $1.63 billion in the first quarter of 2008 to $1.6 billion in the just-reported quarter. The devicemaker experienced its most significant decline in sales of medical-surgical equipment, which were down more than 5%.