Zimmer’s U.S. sales stayed flat during the 3 months ended Sept. 30, 2012, as compared with the same period last year, but European revenues slid 3%, much of that due to the currency exchange impacts.
On a constant currency basis, European sales grew 8%, a strong showing for Zimmer.
"I think that this quarter is a pretty extraordinary accomplishment. I’m not sure that, that level of above market growth rate is reasonable to expect every quarter," president & CEO David Dvorak said during a conference call with investors today. "But we’re going to do very well in that European business for the coming quarters and years in my view."
The orthopedic giant reported earnings of $178 million, or $1.02 per diluted share, on sales of $1.03 billion during its 3rd quarter. That’s a 0.6% slide in revenues when compared with the same period last year, and a 7% drop in profits.
Adjusted for 1-time spending, Zimmer reported $1.15 earned per diluted share, beating Wall Street’s consensus estimates for the quarter by 2¢.
Zimmer saw continued declines in its knee, hip and extremities sales, which slid 2% during Q3, a trend that carried over from Q2, when Zimmer’s knee, hip and extremities product lines were also down 2%, most of that from softness in the EU market.
The continued softness led Zimmer to narrow its full-year 2012 guidance to the lower end of its previous expectations. The company now expects to report flat sales growth for the year, with diluted earnings per share in the range of $4.75-$4.80 on a reported basis and $5.35-%.30 on an adjusted basis. Zimmer had previously projected EPS at $4.65-$4.85 reported and $5.25 to $5.35 adjusted.
The slightly less optimistic outlook didn’t seem to phase traders, who sent ZMH shares up 3% to $64.12 as of about 1:50 p.m. today.
Zimmer also unveiled during a conference call with investors today that it had acquired medical waste management technology company Dornoch Medical Systems for an undisclosed amount.
"Dornoch offers a comprehensive range of medical waste fluid disposal equipment and accessories, including its patented Transposal integrated infectious fluid collection and disposal system," Dvorak said during today’s call. "This rounds out our surgical portfolio, puts us in a very competitive position. It’s good technology. That’s another market that is underpenetrated in the sense that the standard operating procedure within the hospital systems is the red bag the fluid waste that is developed through these procedures. And so we think that there’s a lot of upside within that space."