Stryker Hip Recall Charge Causes Company Profits to Drop 35% in Second Quarter
A $170 million Stryker hip recall charge has resulted in a 35% drop in the manufacturer’s second-quarter profits, causing them to fall short of Wall Street’s earnings expectations.
According to a July 19th report from MassDevice.com, the unexpected cost incurred by Stryker Orthopedics’ recall of its Rejuvenate and ABG II modular-neck hip stems also lowered the company’s earnings outlook for the remainder of 2013. The artificial hips were taken off the market on July 2012 after company data revealed the potential for their metal components to fret and corrode at the modular-neck junction.
Stryker Rejuvenate Recall Costs Company Lower Profits in 2013
During the three-month period ending on June 30th, the medical device company has posted profits of $213 million on sales of $2.21 billion. This represents a bottom-line slide of 34.5 percent for a sales growth of 5.0%. Earnings per share came out to $1, 3 cents less than what Wall Street had predicted.
Following these profit reports, the company also lowered its earnings outlook for the rest of the year, saying it now expects to log EPS of $4.20-$4.26, a decrease from $4.25-$4.40.
Adjustments to the company’s fiscal forecast “included an increase of $19 million for estimated settlement expectations for previously disclosed regulatory issues. We believe these are reasonable estimations of our exposure,” the new CFO for Stryker Orthopaedics said in a statement.
While exact costs associated with the increasing number of Stryker hip lawsuit claims over the Rejuvenate and ABG II devices were not disclosed by the company, it is likely that the manufacturer will face additional charges in the future.
According to court records, at least 159 Stryker claims had been filed in the federal litigation underway in the District of Minnesota as of July 2013, a month after cases were originally transferred to that location. These lawsuits were filed by plaintiffs alleging pain, swelling, and metallosis (metal ion poisoning) and other side effects.
In a state proceeding established in New Jersey’s Bergen County Superior Court, at least 160 lawsuits involving the Rejuvenate and/or ABG II hip stems were pending as of July 9th.
Call a Stryker Attorney to File a Claim
If you think you have a case against Stryker Orthopaedics, contact a lawyer at Bernstein Liebhard LLP today for a free and confidential case evaluation. You may be eligible to seek compensation for your injuries. For more, contact the Firm directly at (877) 779-1414.