Warsaw, Ind.-based Zimmer posted profits of $176.5 million, or $1.03 per share, on sales of $1.18 billion for the 3 months ended June 30. That amounts to profit growth of 16.0% on sales growth of 1.1% compared with the same period last year.
Adjusted to exclude 1-time items, profits were $254.7 million, or $1.49 per share, in line with expectations on Wall Street. But analysts were looking for sales of $1.21 billion for the quarter; that and the lowered 2014 guidance prompted investors to send ZMH shares down 3.6% to $99.46 apiece as of about 10 a.m. today.
"The 2nd quarter was marked by solid sales growth in a number of product categories and geographies, as we continued the ongoing commercialization of innovative new solutions and made further progress on our operational excellence programs," president & CEO David Dvorak said in prepared remarks. "Our confidence in the opportunity to create value in the musculoskeletal market remains strong. In addition, we are excited about the progress we are making in working with the Biomet leadership team to plan our combination, and we continue to anticipate closing the merger in the first quarter of 2015."
Zimmer said it now expects to report adjusted EPS of $6.00 to $6.10, down from $6.00 to $6.20, and cut its sales growth guidance to 2.0%-3.0% on a constant currency basis, down from its prior outlook of 3.0%-5.0% constant-currency growth.