On July 19, Stryker (NYSE:SYK) released second-quarter earnings for the period ended June 30.

  • Sales surged 16%, and EPS was up 11.5%.
  • Operating and net margins fell slightly, but not by an amount worth worrying about.
  • On June 4, the company sold its outpatient physical therapy business to Water Street Healthcare Partners for roughly $150 million in cash.
  • For fiscal 2007, the company anticipates net earnings per share to be $2.40, and the net sales increase is expected to range between 12% to 13%.
  • Stryker is a five-star stock in Motley Fool CAPS.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$1,463.7

$1,261.8

16.0%

Net Profit*

$240.1

$212.1

13.2%

EPS

$0.58

$0.52

11.5%

Diluted Shares

416.9

410.7

1.5%

*Income from continuous operations

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

69.6%

68.8%

0.8

Operating Margin

21.5%

22.9%

(1.4)

Net Margin

16.4%

16.8%

(0.4)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$1,780.2

$867.7

105.2%

Accounts Rec.

$940.5

$842.1

11.7%

Inventory

$733.4

$644.1

13.9%

Liabilities data was not provided.

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$210.9

$195.8

7.7%

Capital Expenditures

$39.1

$49.5

(21.0%)

Free Cash Flow

$171.8

$146.3

17.4%

Free cash flow is a Fool's best friend.

Related Foolishness:

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