Biomet Matches Estimates

Earnings jump 12% from a year ago, and the company guides in line.
By Althea Chang ,

Biomet's

(BMET)

third-quarter earnings rose 12% from a year ago, reflecting strong sales growth in products used in minimally invasive knee replacement surgeries.

Earnings were $96.8 million, or 38 cents a share, in the quarter, compared with $86.6 million, or 34 cents a share, last year. Sales were $482 million, up 18% from a year ago.

Excluding acquisition and other costs, earnings rose 17% from a year ago to $101.6 million, or 40 cents a share. The results exclude costs due to the acquisition of Merck KGaA's share of the Biomet Merck last March 2004, as well as the acquisition of Interpore International last June.

On that basis, analysts surveyed by Thomson First Call had been expecting earnings of 40 cents a share on sales of $481 million.

Sales of the company's spinal products increased 117% worldwide during the third quarter as Biomet broadened its line of spinal products and technologies through its acquisition of Interpore. In its core product group, replacement joints used in reconstructive surgery, knee sales increased 31% worldwide during the third quarter and 36% in the U.S.

For the near future, Biomet CEO Dane Miller sees accelerated sales growth in knee market and a restimulation in the hip market after recent doldrums. Although Miller acknowledges it will be difficult to sustain 30%-plus growth, "the knee market will continue to grow beyond most estimates," he says.

Despite increased SG&A expenses and difficulty integrating sales forces and merging distribution systems after the Interpore acquisition, CEO Dane Miller, in a conference call this morning, said the company is comfortable with estimates of $503 million to $530 million in revenue, and earnings of 42 to 44 cents per share, for its fiscal fourth quarter ending May. Analysts were predicting earnings of 44 cents a share for the quarter.

Loading ...