Quarterly Earnings Reports Show Device Sector Rebounding Maybe economists were right (they have b

Quarterly Earnings Reports Show Device Sector Rebounding

Maybe economists were right (they have been correct on occasion, after all). Maybe the recession really is over.

If the latest quarterly earnings from medical device makers are any indication, the word “maybe” no longer factors into the economic recovery equation. Several device firms posted higher-than-expected quarterly earnings over the last two months, moves that have prompted market analysts to declare the start of a “slow and steady recovery” in the medical device sector.

Medtronic Inc., Stryker Corp., St. Jude Medical Inc., and Johnson & Johnson reported results that topped analysts’ forecasts, according to quarterly earnings data from the companies. The healing economy helped Kalamazoo, Mich.-based Stryker achieve first-quarter net income of $322 million, or 80 cents per share, a 14.5 percent increase compared with the $281 million, or 71 cents per share the company reported in the first quarter of 2009. Net sales rose 12.4 percent to $1.8 billion, while orthopedic implant sales jumped 10.7 percent to $1.08 billion on higher shipments of hips, knees, spinal and trauma implants.

Sales of medical and surgical equipment in the company’s MedSurg division climbed 15 percent to $722 million in the first quarter, ended March 31. Stryker executives attributed the higher sales figure to increased shipments of endoscopy and communications systems. “That’s a very strong number given what is still somewhat of a pressured capital budget situation in the United States,” Jeff Johnson, an analyst with Robert W. Baird & Co. in Milwaukee, Wis., told Reuters.

Medtronic recorded some strong numbers as well. In fact, the fourth quarter of fiscal 2010 (ended April 30) was one for the history books: The Minneapolis, Minn.-based medical device behemoth reported more than $4 billion in revenue during the quarter. In addition, sales increased across nearly all business segments (Spinal is still struggling) and net earnings grew astronomically, according to Medtronic’s fourth quarter and fiscal 2010 earnings report.

The $4.2 billion the company generated in the fourth quarter represents a 10 percent jump compared with the same period in fiscal 2009. Net earnings totaled $954 million, or 86 cents per diluted share, increases of 826 percent and 856 percent, respectively. On a non-GAAP basis, Medtronic’s fourth-quarter net earnings were $986 million and 89 cents per diluted share.