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Biomet Revises 4Q:05 Earnings Guidance Downward BY JOHN CHOPACK, JUNE 21, 2005

Biomet announced last evening that it was reducing its 4Q:05 earnings guidance as a consequence of hitting the low end of its previous range for 4Q:05 revenues. The Company stated that revenues totaled $503 million for the 4Q:05 which is just within their previous guidance of $503-530 million. Biomet stated that it now anticipates earnings to range between $0.40 and $0.42 per share after adjustments. Their previous guidance, which was provided in March of this year, was for 4Q:05 earnings to range between $0.42 and $0.44. More importantly, analyst had been forecasting revenues to total $520 million and earnings per diluted share to total $0.44.

The Biomet announcement comes on the heels of Zimmer Holdings announcement last week that it too was lowering its guidance. However, it seems that Zimmer's revised guidance was a direct result of foreign currency translation rather than an operational issue. Zimmer will be reporting its 2Q:05 earnings on July 28, 2005.

Some analysts, including Raj Denhoy of Piper Jaffrey, seemed a little concerned over Biomet's earnings announcement stating, "it's kind of hard to get a read on the rest of the industry based on one company's numbers. But we would have liked to seen better results."

Although Biomet's growth in revenues across most of its business lines, it still reported a 27% increase in spinal revenues and revenues from sales of knee products increased 20% over the same period a year ago. However, hip sales increased only 10% in the quarter while fixation products decreased by 4%.

Biomet also reported a reorganization of its EBI division as James R. Pastena resigned and Bart Doedens, M.D. was promoted to president. This is ironic given that the spinal division of the Company, which is a part of EBI, reported the best revenue growth rate for Biomet.

We are anxious to see investor's reaction to the announcement. Biomet is always the first to report their earnings because their fiscal year ends in May. Typically, investors have a tendency to anticipate the other orthopedic companies including Zimmer and Stryker to report in a similar fashion to Biomet. For this reason, we may see a sell-off of some of the large joint reconstructive companies during the week.

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