On Tuesday, Zimmer Holdings (NYSE:ZMH), which makes orthopedic implants, released fourth-quarter and year-end results for the period ended Dec. 31, 2006. Here are the quick and dirty details for the quarter.

  • Sales grew 10.1% to $934 million, led by reconstructive segment revenue in the Americas and knee segment sales in Asia Pacific.
  • Total diluted earnings grew 27.5% as higher profit margins and the lower number of shares outstanding boosted bottom-line results.
  • Free cash flow for the quarter came in at $156 million, compared with reported net income of $245 million.
  • Zimmer's stock is up about 50% from its 52-week lows and has the top rating -- five stars -- in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q4 2006

Q4 2005

Change

Sales

$926

$934

$848

10.1%

Net Profit

--

$245

$200

22.6%

EPS

$0.99

$1.02

$0.80

27.5%

Diluted Shares

241

250

(3.5%)

Three months ended Dec. 31, 2006 and 2005

Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

77.77%

78.10%

(0.33)

Operating Margin

36.24%

33.13%

3.11

Net Margin

26.21%

23.53%

2.68

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$268

$245

9.3%

Accounts Rec.

$626

$524

19.3%

Inventory

$638

$584

9.4%



Liabilities

Q4 2006

Q4 2005

Change

Long-Term Debt

$100

$82

22.1%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$247

$251

($3)

Capital Expenditures

$91

$60

$31

Free Cash Flow

$156

$190

($34)
Three months ended Dec. 31, 2006 and 2005. Capex includes additions to instruments costs.

Find out why Fools always follow the money.

Comparable companies:

  • Biomet (NASDAQ:BMET)
  • Stryker (NYSE:SYK)
  • Smith & Nephew (NYSE:SNN)
  • Wright Medical Group (NASDAQ:WMGI)
  • ArthroCare (NASDAQ:ARTC)

Related Foolishness:

Need new ideas for your money? Investors like you rate thousands of stocks on Motley Fool CAPS to help you with your own stock selections. It's fun --and it's free.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann is long shares of Biomet but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.