Zimmer Holdings


beat Wall Street's third-quarter earnings predictions and said it would likely do so in the fourth quarter and 2005.

The giant maker of orthopedic products and devices earned $140 million, or 56 cents a share, on revenue of $700.2 million, excluding one-time gains and charges, for the three months ended Sept. 30. The consensus of analysts polled by Thomson First Call predicted earnings of $131.9 million, or 53 cents a share, on sales of $691.8 million.

On a GAAP basis, Zimmer, based in Warsaw, Ind., earned $127.9 million, or 52 cents a share, on revenue of $700.2 million, compared with a profit of $85 million, or 43 cents a share, on revenue of $398.2 million for the same period last year.

The company's GAAP results reflect the acquisition of Centerpulse 12 months ago and the acquisition of Implex in April 2004. GAAP results include the impacts of acquisition and integration expenses, changes in inventory and a change in accounting from the previous year.

Financial results were announced after markets had closed. In regular trading, the stock lost $1.12, or 1.6%, to $67.90. In after-hours trading, the stock gained $2.10, or 3.1%, to $70.

The company said it was modifying its fourth-quarter sales guidance slightly to a range of $775 million to $780 million, down from a previous range of $775 million to $790 million. The Thomson First Call consensus is $790.7 million.

But Zimmer raised its non-GAAP fourth quarter EPS prediction to a range of 62 cents to 64 cents, thanks to improved gross profit and operating profit margins. The Thomson First Call consensus is 62 cents. Previously, Zimmer had predicted a fourth-quarter EPS 61 of cents to 63 cents.

The company also unveiled non-GAAP 2005 financial estimates: EPS in the range of $2.80 to $2.85 and revenue in the range of $3.33 billion to $3.35 billion. The Wall Street consensus is for an EPS of $2.79 and revenue of $3.36 billion.

The company's GAAP earnings-per-share prediction for 2005 is $2.68 to $2.73.