Zimmer narrows sales forecast as second-quarter revenue misses
(Reuters) - Orthopedic device maker Zimmer Holdings Inc (ZMH.N) reported lower-than-expected quarterly revenue as sales declined at its knee and hip implants segments.
Sales of medical implants from Zimmer and other companies have been under pressure as Americans delay medical procedures to save money in a weak economy.
Zimmer said sales in its knee segment fell 2 percent to $460.7 million, while sales at its hips segment fell 1 percent to $340.7 million. The two segments together account for more than 70 percent of the company's total sales.
"I think results were relatively in line ... (though) their hip and knee businesses, were slightly under consensus number," Cowen and Co analyst Josh Jennings said.
"Strong performance by Biomet LVBHAB.UL and J&J (JNJ.N) last week raised expectations."
Johnson & Johnson reported a 2.9 percent growth in sales from medical devices in the Unites States for the second quarter.
Zimmer also narrowed its full-year sales growth forecast to 2.5 percent to 3.5 percent, excluding the effects of currency fluctuations. It had earlier forecast sales growth of 2 percent to 4 percent.
The company also narrowed its net income forecast for the year to $4.75 to $4.85 per share. On an adjusted basis, it expects to earn $5.25 to $5.35 per share.
Analysts, on average, expect full-year earnings of $5.27 per share, on revenue of $4.53 billion, according to Thomson Reuters I/B/E/S.
Net sales for the April-June period fell to $1.13 billion from $1.14 billion last year. Analysts had expected $1.14 billion.
Net earnings, however, rose to $214.5 million, or $1.22 cents per share, from $203.8 million, or $1.06 per share, a year earlier.
Excluding special items, earnings were $1.34 per share, beating estimates of 1.32 per share.
Operating expenses fell 8 percent to $541.2 million.
Zimmer shares were down about 2 percent at $59.49 on Thursday on the New York Stock Exchange. They touched a low of $57.82 earlier in the day.
(Reporting by Balaji Sridharan and Prateek Kumar in Bangalore; Editing by Don Sebastian, Roshni Menon)
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