Stryker Corporation Q3 2007 Earnings Call Transcript

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2007-10-17 18:30:02.0

Tags: Stryker Corp.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Mike Weinstein representing JP Morgan. Please proceed.

Taylor Harris - JP Morgan

Thanks a lot. Hey, it's actually Taylor Harris here for Mike. So, my question is obviously the top line growth was very, very strong this quarter, and perhaps surprisingly so, and not just MedSurg, but some of the orthopaedic businesses outside of hips and knees. So, just to focus on trauma, spine, CMF, was there anything there that is surprising you this year in terms of how strong those businesses are performing?

And then secondly, I know you made a lot of sales force investments in those areas, is any of the strength you think one time in nature this year due to the sales force investments you are making?

Steve MacMillan

Taylor, I think if you look at particular trauma and spine businesses, historically we probably been underdeveloped from a market share standpoint in the United States. And a few years ago we made a strategic commitment to really strengthen those businesses and it’s happened through both the sales forces expansions, as well as frankly a much stronger focus on R&D and just focused leadership. And the same frankly for our craniomaxillofacial business.

And I think we are seeing the impact of the leaders that we’ve put in place there and really having great impact and while we don’t expect those numbers to continue, certainly trauma and spine at 30%. We think we can be growing significantly faster than the market here still for many quarters ahead, again we would not expect it to continue up close to 30, but certainly can they be better than the market, we certainly think so.

And candidly outside the U.S. we still have some opportunities. Our Spine business in Europe was pretty soft this quarter and so are always looking at the opportunities where we can do better. But it is important to note that those businesses collectively will be well over a $1 billion this year and have probably been kind of quietly overlooked in the aftermath of hips and knees they have becomes sizeable and very profitable and high growth businesses for us and clearly playing a bigger part of our overall growth.

Taylor Harris - JP Morgan

Okay, great. And then one additional question. You referenced the tough comp you have in the fourth quarter. You are guiding, I think organically the growth of 10.5% to 12.5%, which is it’s certainly lower than what you have done in the past two quarters. Is that really just a comparison issue or should we read anything into that as you look forward to 2008 and what type of growth we should expect next year?

 

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