Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter ended September 30, 2010. The Company reported third quarter net sales of $965 million, a decrease of 1.1% reported and 0.5% constant currency from the third quarter of 2009. Diluted earnings per share for the quarter were $0.96 on both a reported and an adjusted basis, an increase of 9.1% adjusted over the prior year period.
"The Company delivered solid earnings and cash flow performance in a quarter affected by challenging global economic conditions," said David Dvorak, Zimmer President and CEO. "We believe that our continued progress with new product introductions across our businesses will position us for an improved performance in the fourth quarter and accelerated growth beyond 2010 as the economy strengthens."
Net earnings for the third quarter were $191.1 million on a reported basis and $192.4 million on an adjusted basis, an increase of 2.2% adjusted over the prior year period. Operating cash flow for the third quarter was $320.3 million. Net earnings for the first nine months of 2010 were $562.0 million on a reported basis and $621.0 million on an adjusted basis, an increase of 1.2% adjusted over the prior year period.
During the quarter, the Company utilized $225.6 million of cash to acquire 4.2 million shares. At the end of the third quarter, $1.3 billion of share repurchase authorization remained available under the current program, which expires on December 31, 2013.
Guidance
The Company provided fourth quarter revenue and adjusted EPS guidance and updated its full-year sales and adjusted EPS guidance for 2010. Fourth quarter revenues are expected to grow in the range of 0% to 2% on a constant currency basis. As a result, the Company now expects 2010 full-year revenues to increase approximately 2% on a constant currency basis, which compares with prior guidance of between 3% and 5%. Assuming foreign currency exchange rates remain near recent levels, the Company estimates that foreign currency translation will increase revenues for the full year 2010 by 0.5%. Fourth quarter adjusted diluted earnings per share are projected to be in the range of $1.17 to $1.22. As a result, full-year 2010 adjusted diluted earnings per share are now projected to be in the range of $4.24 to $4.29, which is within the prior guidance of $4.15 to $4.35.