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Zimmer profits fall, but beat expectations

October 22, 2009

Profits fell at Zimmer Holdings Inc. during the third quarter, the company announced Thursday morning, but the maker of orthopedic implants exceeded the expectations of Wall Street analysts.

The Warsaw-based company recorded third-quarter profits of $150 million, down 30 percent from the same period a year ago. But, excluding extraordinary gains and charges from both quarters, Zimmer’s profit decline was a more modest 14 percent.

On that adjusted basis, Zimmer’s earnings totaled 88 cents per share, exceeding the predictions of Wall Street analysts who expected profits of 86 cents per share, according to data from Thomson Financial Network.

A year ago, Zimmer earned 97 cents per share in the third quarter.

“We believe we are stabilizing our core knee and hip franchises and establishing a solid foundation for future growth,” said Zimmer CEO David Dvorak in a statement.

Zimmer reaffirmed its full-year profit forecast, adjusted for extraordinary items. It called for a range of $3.85 to $4 per diluted share.

Sales in the third quarter rose 2.4 percent, to $976 million, turning around several quarters of declining revenue. Sales in the second quarter fell 5.5 percent, to $1.02 billion, or 0.6 percent when excluding currency fluctuations.

Zimmer’s stock price plunged during last fall’s sell-off on Wall Street. However, shares are up 29 percent in 2009. The company’s stock closed Wednesday at $52.23 per share.

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