Wachovia Hikes Estimates for Zimmer Holdings

Analyst Theodore Huber keeps a market perform rating, as he believes the company's improved guidance is already largely in the share price

Zimmer Holdings (ZMH ) shares rose after the company says it sees fourth-quarter operating EPS of at least 48 cents, and 2004 EPS of $2.04 to $2.07. Wachovia increased its estimates on the news.

Analyst Theodore Huber says the company's improved EPS guidance comes on better than expected fourth-quarter sales of $700 million to $30 million above consensus, with the weak dollar also contributing to upside. He calculates stronger than expected sales at the core Zimmer implant business contributed $25 million, with currency adding near $5 million. He thinks gross margin improvement also added to upside.

Huber raised his EPS forecasts from 43 cents to 48 cents for the fourth quarter, from $1.72 in 2003 to $1.77, and $1.99 in 2004 to $2.06. He sees $2.56 for 2005 EPS. However, he maintains a market perform rating, as he believes the company's improved guidance is already largely in the share price.

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