Zimmer quarterly profit falls 16 percent-WEB ONLY

First-quarter profit at Zimmer Holdings Inc. dropped 16 percent, but came in slightly ahead of analysts’ expectations.

The Warsaw-based maker of orthopedic implants this morning announced earnings of $202 million, or 91 cents per share, for the three months ended March 31. In the same period last year, Zimmer earned $1.02 per share.

Excluding extraordinary items, Zimmer earned 95 cents per share. On that basis, analysts expected profits of 94 cents per share, according to a survey by Thomson Financial.

Zimmer reduced its share count by 8.6 million during the quarter, spending $301 million to do so.

Sales dropped 6 percent, to $993 million, depressed by less favorable exchange rates and a slowdown in elective hip and knee replacements.

Zimmer is also still struggling after the federal crackdown in 2007 on the orthopedics industry’s practice of paying hefty consulting fees to physicians as a strategy to boost sales. Zimmer met the terms of its deferred prosecution agreement with the U.S. Department of Justice this month.

“We continue to make progress in our efforts to rebuild momentum in our business,” CEO David Dvorak said in a statement.

Zimmer reaffirmed its 2009 profit forecast. It expects to earn $3.85 to $4 per share.

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