Shares of Zimmer Holdings Inc. (NYSE:ZMH) jumped nearly 9 percent this morning, despite news that its profits last year slid nearly 17 percent.

Wall Street must have liked Zimmer’s explanation for the decline: A $204 million fourth-quarter charge to its spinal unit’s books, based on the company’s dim view of the spinal market’s prospects.

The charge sent Q4 earnings down 77.5 percent to $34.9 million, or 18 cents per share, compared with $155.2 million, or 74 cents per diluted share, during Q4 2009. Full-year profits slipped to $596.9 million, or $2.97 per share, compared with $717.4 million, or $3.32 per share, during the same period in 2009.

Adjusted to exclude the impairment charge, however, Zimmer said Q4 profits were $1.27 per share, up 13.4 percent, and full-year income rose 9.9 percent to $4.33.

Fourth-quarter sales were $1.13 billion, up 2.5 percent; the top line grew 3.0 percent for the full year, to $4.22 billion.

Zimmer also cited its efforts to integrate the buyout of Abbott’s spine business as it looks to merge sales forces. President and CEO David Dvorak said the company’s efforts to streamline helped to improve its operating margins and cash flow.

“Moving into 2011, we expect to continue to strengthen our leadership position in joint reconstruction and to enhance our market share in emerging businesses and geographic market,” Dvorak said in prepared remarks.

Zimmer said it expects sales to grow between 2 percent and 4 percent in 2011, with diluted EPS between $4.25 and $4.45 (or $4.60 to $4.80 after adjusting for the ongoing restructuring effort aimed at saving $100 million a year).

The company also said it bought back 2 million shares of its own stock during the fourth quarter, spending about $100.9 million. That took its total share buyback last year to $505.5 million, or 9.1 million shares — and there’s still $1.2 billion in the kitty for 2011 and 2012.

Zimmer shares were up 8.6 percent to $60.12 as of about 10:15 this morning.