Originally Published MX March/April 2003
BUSINESS NEWS
Top Medtech Firms Post Gains for 2002As companies in many other industries report lackluster performance or actual declines for 2002, medical technology companies continue to buck the prevailing economic trends. According to annual reports and company releases issued since the beginning of this year, all of the top-20 publicly traded medical technology firms posted positive revenue growth during 2002 (see table).
|
Company
|
2002
revenues |
2001
revenues |
Variance |
4Q02 |
4Q01 |
Variance |
| Johnson & Johnson |
12,600
|
11,191
|
12.6
|
3,318
|
2,867
|
15.7
|
| Tyco Healthcare |
9,573
|
8,587
|
11.5
|
2,005
|
1,770
|
13.3
|
| GE Medical Systems |
8,955
|
8,409
|
7.0
|
2,750
|
2,629
|
4.6
|
| Baxter International Inc. |
8,110
|
7,360
|
10.2
|
2,260
|
2,060
|
9.7
|
| Siemens Medical Solutions |
7,684
|
7,259
|
5.9
|
1,831
|
1,770
|
3.4
|
| Medtronic Inc.a |
7,310
|
6,137
|
19.1
|
1,913
|
1,593
|
20.2
|
| Philips Medical Systemsb |
6,844
|
4,834
|
41.6
|
1,883
|
1,916
|
-1.7
|
| Abbott Laboratories |
6,652
|
6,442
|
3.3
|
1,766
|
1,732
|
2.0
|
| Cardinal Health |
6,400
|
6,200
|
3.2
|
1,600
|
1,600
|
0.0
|
| Becton Dickinson & Co. |
4,140
|
3,827
|
8.2
|
1,052
|
945
|
11.3
|
| 3M Healthcare |
3,560
|
3,301
|
7.3
|
918
|
865
|
6.1
|
| Guidant Corp. |
3,240
|
2,708
|
19.6
|
896
|
719
|
24.6
|
| Stryker Corp. |
3,012
|
2,602
|
15.8
|
829
|
710
|
16.8
|
| Boston Scientific Corp. |
2,919
|
2,673
|
9.2
|
814
|
677
|
20.2
|
| Amersham plc |
2,616
|
2,591
|
1.0
|
682
|
722
|
-5.8
|
| Kodak Health Imaging |
2,274
|
2,262
|
0.5
|
619
|
570
|
8.6
|
| Beckman Coulter Inc. |
2,059
|
1,984
|
3.8
|
596
|
578
|
3.1
|
| Smith & Nephew |
1,733
|
1,508
|
14.9
|
N/A
|
N/A
|
N/A
|
| St. Jude Medical |
1,590
|
1,347
|
18.0
|
409
|
348
|
17.6
|
| Alcon Inc. |
1,439
|
1,352
|
6.4
|
385
|
356
|
8.1
|
| aFourth
quarter ending January 26, 2003 bSales gain attributed primarily to acquisitions. |
||||||
| Reported revenues of the top-20 publicly traded medical technology companies for calendar 2002 versus calendar 2001, and for October through December 2002 (4Q02) versus October through December 2001 (4Q01). Only divisions reporting medical product revenues are included; pharmaceutical, consumer-product, and healthcare services divisions are excluded. All figures in $ millions at February 2003 rate. | ||||||
Year-to-year sales in-creases in this group of companies ranged from the low of 0.5% posted by Kodak Health Imaging to the acquisition-driven 41.6% of Philips Medical Systems. The average yearly gain for the group was 10.9%.
Cardiology companies were among the best performers for the year, with Guidant (19.6%), Medtronic (19.1%), and St. Jude Medical (18.0%) all posting strong gains.
Gains for companies in the diagnostic imaging sector were more modest. Discounting increases resulting from its acquisitions of Agilent's Healthcare Solutions Group in August 2001, and Marconi Medical Systems in October 2001, Philips Medical Systems revenues rose only 5%, according to the company. Among other imaging companies, GE Medical Systems posted the strongest growth (7.0%), followed by Siemens Medical Solutions (5.9%), and Kodak Health Imaging (0.5%).
Other strong 2002 performers in the top 20 included Stryker, which reported a gain of 15.8%, and Smith & Nephew, whose revenues increased by 14.9%.
Such large medical technology companies have been among the best performers of the broader healthcare industry since the end of 1999. And al-though last year's performance did not keep pace with 2001, the company reports issued so far this year suggest that the medtech industry is continuing to outperform the general economy.
Given the worsening condition of the U.S. and global economies, how-ever, outperforming them may not have been as tough as it seems. According to the U.S. Department of Commerce's Bureau of Economic Analysis, the U.S. current-dollar gross domestic product (GDP) rose by only 3.6% during 2002. During the final quarter of the year, current-dollar GDP growth slowed slightly, increasing at an annualized rate of only 3.1%.
Despite such continued deterioration in general economic conditions at the end of 2002, medtech companies continued to show strong quarter-over-quarter growth. Of the top-20 public companies, only two—Philips Medical Systems and Amersham—reported decreased 4Q02 revenues compared with those of 4Q01.
Only one of the top-20 companies—Cardinal Health—remained flat on a quarter-over-quarter basis. Fourth-quarter figures for Smith & Nephew were unavailable.
Among the remaining 16 companies, fourth-quarter increases ranged from the 2.0% reported by Abbott Laboratories to the 24.6% of Guidant. Quarter-over-quarter gains for the 19 reporting companies averaged 9.3%.
Once again, quarter-over-quarter gains were especially high among companies with a strong presence in cardiology. Guidant (24.6%), Medtronic (20.2%), Boston Scientific (20.2%), and St. Jude Medical (17.8%) all posted significant 4Q02 growth over 4Q01.
Such solid historical performance bodes well for the continued success of large medtech companies in both the near and long terms. Moreover, industry analysts insist that medical technology companies are benefiting from defensive investors, who are using medtech as a safe haven during the current economic downturn. Even so, in the current economic environment, company leaders may have to work extra hard to turn sustained growth into increased shareholder investments.
Copyright ©2003 MX
