Zimmer recently released its first quarter financial report.
Here are five observations from Zimmer's report.
1. The company reported net earnings of $221.5 million in Q1, up from $218.6 million during the same period last year. The company also reported net sales of $1.2 billion, up slightly from Q1 2013 where the company saw net sales of $1.1 billion.
"Zimmer produced solid results during the first quarter, providing further validation of our long-term growth and stockholder value creation strategies," said David Dvorak, Zimmer president and CEO in the news release. "As we continue focus on the execution of our quality and operational excellence initiatives, we believe that the company is well positioned for continued growth in the evolving global healthcare landscape through the ongoing development and commercialization of innovative and clinically relevant solutions."
2. In April, the boards of Zimmer and Biomet approved the definitive merger agreement, in which Zimmer will acquire Biomet for $10.35 billion in cash and $3 billion in Zimmer stock. Additional costs connected to the pending transaction with Biomet were excluded from the adjusted earnings measure, according to the financial results news release.
"Competition just got tougher as Zimmer will effectively surpass Stryker to attain the number two spot in orthopedic sales and is now in prime position to compete with market leader Johnson & Johnson," said Frost & Sullivan Advanced Medical Technologies Research Analyst Tara Shelton after the acquisition was announced. "With the deal not closing until early 2015, the effect has yet to be seen in regards to future employment, commodity pricing and innovation."
3. The company's earnings guidance was updated in this most recent report "to give effect to a change in the anticipated number of diluted weighted average shares outstanding for 2014." The number is expected to increase since the discontinuation of previously guided share repurchases ahead of the Biomet transactions. The company now expects full-year 2014 diluted earnings per share at $4.90 to $5.10; prior full-year 2014 guidance for adjusted diluted earnings per share was $6.10 to $6.30.
4. For the first quarter of 2014, the company' spine sales were at $48.3 million, up 1 percent over the same period last year. Overall net sales were also up 1 percent in the Americas — to $638.7 million — and up 6 percent in Europe to $$236.9 million. The European sales growth was driven by an increase in reconstructive and knee sales in those markets. Trauma, on the other hand, experienced a 3 percent decline overall.
5. At the end of April, Zimmer launched the Optio-C Anterior Cervical System. The global orthopedic devices market is expected to reach $41.2 billion in 2019, according to a report released by Research and Markets. It is expected to grow at a compound annual growth rate of 4.9 percent from 2013 to 2019. Zimmer was named one of the major players in the market.
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