Zimmer Holdings, Inc. Earnings Cheat Sheet: Second Straight Quarter of Rising Net Income

S&P 500 (NYSE:SPY) component Zimmer Holdings, Inc. (NYSE:ZMH) reported its results for the second 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 Second Quarter

Results: Net income for Zimmer Holdings, Inc. rose to $203.8 million ($1.06 per share) vs. $165.5 million (82 cents per share) in the same quarter a year earlier. This marks a rise of 23.1% from the year earlier quarter.

Revenue: Rose 7.5% to $1.14 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ZMH reported adjusted net income of $1.21 per share. By that measure, the company beat the mean estimate of $1.19 per share. Analysts were expecting revenue of $1.13 billion.

Quoting Management: “Zimmer again generated solid results in the second quarter, amid ongoing challenging global economic conditions,” said David Dvorak, Zimmer President and CEO. “Our results reflect improved sales execution in support of new product introductions across our diverse geographic channels, as well as the positive impact of operational improvement initiatives and continued disciplined capital deployment.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the first quarter, by 8 cents in the fourth quarter of the last fiscal year, and by one cent in the third quarter of the last fiscal year.

Gross margin shrank 1.6 percentage points to 74.7%. The contraction appeared to be driven by increased costs, which rose 14.9% from the year earlier quarter while revenue rose 7.5%.

Revenue has now gone up for three straight quarters. In the first quarter, revenue rose 5% to $1.12 billion while the figure rose 2.5% in the fourth quarter of the last fiscal year from the year earlier.

Net income has dropped 9.3% year over year on average across the last five quarters. Performance was hurt by a 77.5% decline in the fourth quarter of the last fiscal year 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), Smith & Nephew plc (NYSE:SNN), MAKO Surgical Corp. (NASDAQ:MAKO), NuVasive, Inc. (NASDAQ:NUVA), TranS1 Inc. (NASDAQ:TSON), and Alphatec Holdings, Inc. (NASDAQ:ATEC).

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(Source: Xignite Financials)

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