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S&P 500 (NYSE:SPY) component Zimmer Holdings (NYSE:ZMH) will unveil its latest earnings on Thursday, July 26, 2012. Zimmer Holdings designs, develops, manufactures and markets orthopedic and dental reconstructive implants, spinal implants, and trauma products.
Zimmer Holdings Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.32 per share, a rise of 9.1% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 9.8% compared to last year’s $5.27.
Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the first quarter, the company reported net income of $1.30 per share versus a mean estimate of profit of $1.30 per share. In the fourth quarter of the last fiscal year, the company beat estimates by 2 cents.
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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.43 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.78 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 57.9% to $1.37 billion while assets rose 1.4% to $3.32 billion.
Stock Price Performance: Between May 23, 2012 and July 20, 2012, the stock price had risen $2.64 (4.4%), from $60 to $62.64. The stock price saw one of its best stretches over the last year between January 20, 2012 and January 30, 2012, when shares rose for seven straight days, increasing 8.7% (+$4.90) over that span. It saw one of its worst periods between November 14, 2011 and November 25, 2011 when shares fell for nine straight days, dropping 9.7% (-$5.09) over that span.
Analyst Ratings: There are mostly holds on the stock with 14 of 23 analysts surveyed giving that rating.
This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 0.2% in the third quarter of the last fiscal year and more than fourfold in the fourth quarter of the last fiscal year before increasing again in the first quarter.
On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 7.5% in the second quarter of the last fiscal year, 6.9% in the third quarter of the last fiscal year and 2.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.
A Look Back: In the first quarter, profit rose 0.3% to $209.6 million ($1.17 a share) from $208.9 million ($1.08 a share) the year earlier, meeting analyst expectations. Revenue rose 2.2% to $1.14 billion from $1.12 billion.
Wall St. Revenue Expectations: On average, analysts predict $1.14 billion in revenue this quarter, no change from the year-ago quarter. Analysts are forecasting total revenue of $4.53 billion for the year, a rise of 1.8% from last year’s revenue of $4.45 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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