Orthopedic implant maker Zimmer Holdings Inc. said Thursday its fourth-quarter profit fell 78 percent on an impairment charge for its spine unit.
The company reported net income of $34.9 million, or 18 cents per share, down from $155.2, or 74 cents per share, a year earlier. Sales rose 2 percent to $1.13 billion from $1.11 billion.
Excluding charges, the company said it earned $1.27 per share. Analysts polled by FactSet expected, on average, earnings of $1.19 per share on $1.11 billion in revenue.
The company listed a variety of factors for the impairment charge which came out to $204 million, or $1.03 per share. Those factors included a change in the outlook for the spine market in the U.S., along with decreased projected revenue related to the Dynesys Dynamic Stabilization System. It also included products that have been affected with the integration of the U.S. sales channel following the Abbott Spine unit acquisition.
During the quarter, sales of reconstructive products rose 1 percent to $855.8 million, while dental product sales rose 10 percent to $62.4 million and trauma product sales rose 9 percent to $69.2 million. Meanwhile, spinal unit sales fell 5 percent to $60 million and surgical sales rose 8 percent to $87.3 million.
For the full year, Zimmer earned $596.9 million, or $2.97 per share, down from $717.4 million, or $3.32 per share, in 2009. Revenue rose to $4.22 billion from just under $4.1 billion.
Looking ahead, the company expects 2011 adjusted profit between $4.60 and $4.80 per share. Analysts expect profit of $4.65 per share.
Shares rose $4.59, or 8.3 percent, to $59.87 in midday trading. The stock has traded between $46.27 and $62.50 over the last 52 weeks.