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Orthopedic and Dental Industry News
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| Biomet's Revenues by Segment ($ in millions) | |||||||
| 4Q:06 | 3Q:06 | ||||||
| Revs | YoY Growth | YoY Growth Excl. FX | Revs | YoY Growth | YoY Growth Excl. FX | ||
| Reconstructive | $373 | 8% | 11% | $347 | 6% | 10% | |
| Fixation | $64 | 3% | 5% | $62 | 0% | 2% | |
| Spinal Products | $58 | 4% | 5% | $54 | 2% | 3% | |
| Other Products | $45 | 8% | 10% | $43 | 6% | 8% | |
| Net Revenues | $540 | 7% | 10% | $506 | 5% | 8% | |
Given the recent management changes at the Company and perceived pricing pressure within the sector, we were rather impressed with Biomet's earnings report. Biomet reported reconstructive revenue growth of 11% which was higher than industry experts believed the market was growing. Does this mean that Biomet is taking reconstructive share or does it mean the reconstructive market is not as bad as some have predicted? We believe the latter rather than the former, but we will get a better understanding when the rest of the orthopedic companies report in a couple of weeks.
While Biomet posted strong reconstructive revenue growth, its other divisions clearly lagged. Revenues from spinal products increased by only 5% on a constant currency basis during the quarter. Spinal implants/orthobiologics revenues increased by 7% excluding currency and spinal stimulation sales grew by 2%.
Fixation sales continue to be weak. Revenues of fixation products totaled $64 million which was a 5% increase over the 4Q:05 on a constant currency basis. External fixation continues to be weak exhibiting no growth over the same period a year ago.
| Biomet's Hip & Knee Revenues Excl. FX Effects | ||||
| 4Q:06 | 3Q:06 | 2Q:06 | 1Q:05 | |
| YoY Growth | YoY Growth | YoY Growth | YoY Growth | |
| Hip | 10% | 11% | 11% | 12% |
| Knee | 15% | 9% | 13% | 16% |
Management believes revenues will range between $2.15 and $2.22 billion in 2007 which represents an increase between 6-10%. The Company is forecasting earnings to range between $1.85 and $1.95 per share. Analysts are forecasting EPS of $1.92 for 2007.