Do Biomet’s Rising Sales Beckon a New Ortho Dawn? (Walter Eisner @ OTW)
Biomet, Inc. reported a preliminary 4% rise in second quarter 2012 sales after the markets closed on December 19. Total revenues totaled $725.1 million. The next day, orthopedic stocks shot through the roof. Zimmer climbed almost 7%, while Stryker and Medtronic were up close to 3% to 4%. “We would view the Biomet large joint reconstruction results with cautious optimism for the broader hip and knee markets,” wrote Derrick Sung, an analyst with Sanford C. Bernstein & Co., in a note to investors. “Investors are generally pricing in no expectation for an orthopedic market recovery in 2012, so we would view any signs of such as incrementally positive for Stryker and Zimmer, the pure-play orthopedic companies.” Like the rooster crowing at dawn, Biomet is the first of the large orthopedic device companies to report quarterly sales. The company’s results are thus closely watched for what their sales volumes mean for the rest of the industry. Reported hip sales rose 7%, knees were up 2%, and extremities and trauma rose 13%. Only spine sales continued their downward trend, dropping 5%.
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