Zimmer Holdings Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Zimmer Holdings (NYSE:ZMH) will unveil its latest earnings tomorrow, Thursday, January 31, 2013. Zimmer Holdings designs, develops, manufactures and markets orthopedic and dental reconstructive implants, spinal implants, and trauma products.

Zimmer Holdings Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.49 per share, a rise of 9.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.50. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.49 during the last month. Analysts are projecting profit to rise by 10% compared to last year’s $5.28.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 2 cents, reporting profit of $1.15 per share against a mean estimate of net income of $1.13. In the second quarter, the company exceeded forecasts by 2 cents with profit of $1.34 versus a mean estimate of net income of $1.32.

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A Look Back: In the third quarter, profit fell 7% to $178.1 million ($1.02 a share) from $191.5 million ($1.01 a share) the year earlier, but exceeded analyst expectations. Revenue fell 0.6% to $1.03 billion from $1.03 billion.

Here’s how Zimmer Holdings traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

zmh

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 4.81 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 5.09 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 10.6% to $755.5 million while assets rose 4.4% to $3.63 billion.

Analyst Ratings: There are mostly holds on the stock with 16 of 27 analysts surveyed giving that rating.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose more than fourfold in the fourth quarter of the last fiscal year, 0.3% in the first quarter and 5.3% in the second quarter before declining in the third quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 1.1% in the second quarter and dropped again in the third quarter.

Wall St. Revenue Expectations: Analysts predict a rise of 0.9% in revenue from the year-earlier quarter to $1.18 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)