Third-quarter sales at Zimmer Holdings Inc. rose 2.4 percent and adjusted net earnings beat most Wall Street estimates, aided by the sale of selected equity holdings.
The Warsaw, Ind.-based manufacturer of replacement joints and other orthopedic devices reported net earnings of $149.9 million, or 70 cents per share, on $975.6 million in sales during the three months ended Sept. 30. The bottom line fell 30 percent from the $214.7 million profit the company posted in the year-ago period, although when one-time items are excluded, quarterly earnings reached $188.3 million, or 88 cents per share, beating Wall Street’s consensus by two pennies.
The adjusted earnings also did not include a $35 million provision, or about 10 cents per share after taxes, for possible legal claims connected with Zimmer’s Durom Cup. The company temporarily suspended sales (PDF) of the artificial hip component in July 2008 after many patients receiving the device complained of persistent pain and other problems requiring additional surgery to correct.
Global sales in the latest quarter gained $23.3 million from the $952.2 million reported during the same three months of 2008. Sales growth was strongest in the Asia Pacific region, rising 8 percent, with a 4 percent increase in Zimmer’s North American market working to offset a 3 percent dip in European sales.
Knee replacements added up to $270 million in sales at Zimmer during the third quarter, with hip procedures contributing another $288 million. Sales were strongest in North America, combining for nearly 58 percent of all reconstructive revenues and 42 percent of total company sales.
Zimmer’s strongest growth, however, came in its fledgling spinal business, with sales of metal implants, bone transplant devices and other minimally invasive surgical tools reaching $62 million, or 24 percent above comparable sales during last year’s third quarter.
Company officials also said they were sticking with their previous guidance of full-year earnings in a range of $3.85 to $4 a share and sales growth of between 1 percent to 3 percent.