Zimmer profit beats expectations

January 29, 2008

Shares of hip and knee implant maker Zimmer Holdings Inc. surged today after the company reported better fourth-quarter results than analysts expected, and forecast solid 2008 profit and sales.

The Warsaw company's profit and revenue both surpassed Wall Street estimates, as well as its own forecasts, in the fourth quarter. In 2008, Zimmer expects a profit of $4.20 to $4.25 per share, with sales increasing 10 to 11 percent, which implies revenue of $4.29 billion to $4.33 billion.

Analysts surveyed by Thomson Financial expect Zimmer to earn $4.21 per share, on average, with $4.18 billion in revenue.

The stock rose $8.34, or 12.3 percent, to $76.42 in midday trading. The stock took a sharp drop in October after Zimmer cut its fourth-quarter outlook, and has traded near annual lows over the last two months.

Lehman Brothers analyst Bob Hopkins said some analysts were expecting Zimmer to earn $4 per share this year, or possibly less.

"In a clear sign of health in the orthopedic markets, Zimmer reported a solid fourth quarter and provided 2008 guidance well above the worst fears of the market this morning," he wrote.

For 2008, estimates from analysts polled by Thomson Financial ranged from $4.06 to $4.35 per share.

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