Zimmer Holdings Earnings: Stock Breaks Out in Celebration

S&P 500 (NYSE:SPY) component Zimmer Holdings, Inc. (NYSE:ZMH) reported its results for the first quarter. Zimmer Holdings, Inc. designs, develops, manufactures and markets orthopaedic and dental reconstructive implants, spinal implants, trauma products and other products.

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Zimmer Holdings Earnings Cheat Sheet for the First Quarter

Results: Net income for Zimmer Holdings, Inc. rose to $208.9 million ($1.08/share) vs. $205.4 million ($1.01/share) in the same quarter a year earlier. A rise of 1.7% from the year earlier quarter.

Revenue: Rose 5% to $1.12 billion YoY.

Actual vs. Wall St. Expectations: ZMH reported adjusted net income of $1.19 per share. By this measure the company beat the mean analyst estimate of $1.12/share. Estimates ranged from $1.08 per share to $1.16 per share.

Quoting Management: “Driven by the success of recently launched products, Zimmer delivered solid sales results across all geographic segments in the first quarter, resulting in improved margins and leveraged earnings,” said David Dvorak, Zimmer President and CEO. “Our first quarter performance demonstrated continued progress toward our goal of consistently achieving growth at or above market rates in all of our geographies and businesses. We will continue to deliver value to our stakeholders through product innovation, operational excellence initiatives and disciplined capital deployment.”

Key Stats:

While the company has been profitable for the last nine quarters, income has fallen year over year by an average of 13.6% over the past five quarters. The quarter hit the hardest was the fourth quarter of the last fiscal year, that saw a 77.5% drop.

Gross margins grew 0.2 percentage point to 75%. The growth seemed to be driven by increased revenue, as the figure rose 5% from the year earlier quarter while costs rose 3.9%.

Over the last five quarters, revenue has increased 3.4% on average year over year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose 7.1% from the year earlier quarter.

Competitors to Watch: Stryker Corporation (NYSE:SYK), Exactech, Inc. (NASDAQ:EXAC), Wright Medical Group, Inc. (NASDAQ:WMGI), RTI Biologics Inc. (NASDAQ:RTIX), Tornier N.V. (TRNX), Smith & Nephew plc (NYSE:SNN), MAKO Surgical Corp. (NASDAQ:MAKO), NuVasive, Inc. (NASDAQ:NUVA), TranS1 Inc. (NASDAQ:TSON), and Alphatec Holdings, Inc. (NASDAQ:ATEC).

Today’s Performance: Shares of ZMH are trading at $65.95 as of April 28, 2011 at 3:43PM ET, up 4.8% from the previous close.

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