Biomet has posted soft replacement-joint sales in its Q3 2011 report. And as MarketWatch points out, this could raise new questions about an orthopedics market, which has been hurt by the global economic uncertainty.
Biomet's net sales increased one percent during the quarter to $678 million, compared with $669.8 million during the same period last year. Excluding the effect of foreign currency, net sales increased two percent during the quarter. U.S. net sales were flat at $412.4 million, while European net sales decreased four percent to $173 million, according to a company release. In addition, the company reported a net loss of $11.6 million during the quarter, compared with a net loss of $3.1 million during the same period of 2010. Adjusted net income was $63.8 million versus $67.3 million during Q3 fiscal year 2010.
"Net sales increased two percent on a constant currency basis during our fiscal third quarter, but core orthopaedic reconstructive sales were flat," Biomet's President and Chief Executive Officer Jeffrey Binder said in a statement. "While we believe that the hip and knee market continued to remain sluggish during the quarter, with continued pressure on both volume and price, we did not meet our goal of sustainable above-market growth." He added that the company plans to focus on improving its execution of product introductions, as well as sales and marketing effectiveness to regain the momentum it has had over the last four years.
In a conference call, Binder stated that Biomet endured a mix of market weakness and some company-specific issues, including product-launch delays, that likely contributed to its underperformance, MarketWatch reports.
Analysts didn't necessarily project negative implications based on Biomet's report. It's "entirely possible that slower growth at Biomet could actually be a positive sign for its competitors' market shares," Mizuho Securities analyst Michael Matson said, as quoted by MarketWatch. William Blair analyst Matthew O'Brien called Zimmer and Stryker "the most likely beneficiaries" from Biomet share losses. Biomet's quarters end a month earlier than many of its competitors, which include Stryker, Zimmer, Smith & Nephew and Wright Medical Group.
Bernstein Research analyst Derrick Sung said Biomet's results matched his expectations for continued orthopedic-market weakness, according to MarketWatch.