Zimmer Holdings, Inc.’s third quarter reconstructive sales rose 4% on a reported basis to $788.3 million. Excluding currency, sales climbed 6%. Overall, said BMO Capital Markets analyst Joanne Wuensch, the company’s total revenue increased at the highest rate since the fourth quarter of 2007.
Excluding currency, knees were up 7%, hips up 2%, extremities up 15%, trauma up 8% and spine was down 3%.
Gaining Knees, Ceding Hips
Wuensch said it looked like the early sales of the company’s Persona Personalized Knee System is gaining traction, with volume/mix up 9.1% offset by 1.7% negative price, and “excellent feedback” from new and current physicians. Given the early read from other companies, Wuensch said it looks like the knee market was up ~4%; excluding currency, with Zimmer’s share increasing almost 100 basis points year-over-year.
At this stage of the reporting season, Wuensch says the hip market looks to have increased ~5% excluding currency, with Zimmer ceding some share. Overall, Wuensch views the third quarter as a good quarter for Zimmer, taking knee market share, leveraging the income statement, in stable to improving end markets.
Entry Into Spine Lateral Access Market
In its October 24, 2013 quarterly report, the company cited the recent receipt of 510(k) clearance from the FDA to market the Zimmer Patient Specific Instruments (PSI) Shoulder system to complement its Trabecular Metal Reverse Shoulder system for reverse shoulder arthroplasty procedures.
Additionally in the quarter, Zimmer Spine announced its entry into an exclusive global distribution agreement to market the Lateral Locking Cage (LLC), a first of its kind, minimally invasive lateral interbody cage for the treatment of degenerative disc disease and instability. Implanted through a unique minimally invasive approach, the LLC represents Zimmer Spine’s entry into lateral access lumbar surgeries, a fast growing segment of the global spine market.
4.5% Growth Expected for 2014
The company reaffirmed its 2013 revenue guidance. Full-year revenues for 2013 are expected to increase approximately 4.5% on a constant currency basis from 2012. The company now estimates that foreign currency translation will decrease revenues between 1.5% and 2.0% for the year, resulting in reported revenue growth between 2.5% and 3.0%.
Dave Dvorak, the company’s president and CEO, said Zimmer achieved accelerated top-line growth in the third quarter, fueled by innovative new product offerings and the focused execution of the global sales team. “For the balance of 2013, we expect to continue building stockholder value through the ongoing execution of our growth, operational excellence and capital deployment strategies.”
