UPDATE 3-Zimmer earnings fall on charge; sales rise

* EPS ex-items $1.09 vs Street view $1.05

* Revenue $1.06 bln vs year-earlier $1.02 bln

* Reaffirms full-year sales and adjusted EPS forecast

* Shares rise nearly 1 percent (Adds details, statement from CEO

BOSTON, July 22 (Reuters) - Medical device maker Zimmer Holdings Inc ZMH.N said its second-quarter earnings fell due to one-time charges, but sales rose, led by its hip replacement products.

Earnings reports earlier this week from rivals Johnson & Johnson JNJ.N and Stryker Corp SYK.N led to concern among investors that the orthopedic market may be slowing as hospitals seek to wring out cost concessions.

But David Dvorak, Zimmer’s chief executive, said the company “didn’t see much change in the way of pricing pressure.”

“Regarding the overall market, while there did appear to be a modest step-down in growth during the second quarter, we believe that the broader market dynamics are unchanged,” he said.

That reassured investors, and Zimmer’s shares rose nearly 1 percent in mid-morning trading on the New York Stock Exchange.

“Given the results of Biomet, DePuy and Stryker, and increased investor concerns on the overall orthopedic market, we view Zimmer’s numbers as positive relative to the overall backdrop in the current environment,” said David Roman, an analyst at Goldman Sachs, in a research report.

Net profit declined to $165.5 million, or 82 cents a share, from $210.1 million, or 98 cents a share, a year earlier.

Excluding one-time items, the company earned $1.09 a share, 4 cents above the average Wall Street estimate, according to Thomson Reuters I/B/E/S.

Revenue rose to $1.06 billion from $1.02 billion. Analysts were expecting $1.07 billion.

The company expects new product launches to help sustain growth through 2010, and it reaffirmed its full-year adjusted earnings and sales forecasts. It expects revenue to increase between 3 and 5 percent on a constant-currency basis.

Assuming foreign exchange rates remain near recent levels, the company said it estimates currency translation will reduce revenue by 0.5 percent for the full year, resulting in revenue growth of between 2.5 percent and 4.5 percent.

It expects full-year earnings, excluding one-time items, of $4.15 to $4.35 a share.

The company said its board has approved an additional $1.5 billion stock buyback program.

During the quarter, Zimmer used $85.4 million of cash to buy 1.4 million shares under an existing $1.25 billion repurchase program.

The company also said on Thursday that it agreed to acquire Beijing Montagne Medical Device Co Ltd to expand its presence in the rapidly growing Chinese orthopedic implant market. The acquisition is expected to close in late 2010 or early 2011.

Company executives told analysts on a conference call that it expects the size of the market in China to be worth some $2 billion within the next three years.

Zimmer’s shares rose 0.8 percent to $53.39 in mid-morning trading on the New York Stock Exchange. Earlier they rose as high as $55.17. (Reporting by Toni Clarke, editing by John Wallace and Derek Caney)