After issues related to a Department of Justice investigation involving Zimmer Holdings (NYSE:ZMH) and orthopedic competitors Johnson & Johnson (NYSE:JNJ), Stryker (NYSE:SYK), and Smith & Nephew (NYSE:SNN) were finally resolved, Zimmer gave shareholders something else to ponder yesterday: lowered Q4 guidance.

The company's Q3 results weren't all that shabby, and I respect management's transparency about the lowered guidance, but the news did trip up shareholders, with shares of Zimmer trading down more than 14% today. The company revised its Q4 adjusted earnings per share guidance from $1.16 to a range of $1.03 to $1.05; management said it expects lower sales, and that contributed to most of the revision.

Zimmer's adjusted EPS for the third quarter increased 18% over the year-ago quarter, as net sales increased by 10%. Its knee implant business, which now accounts for 42% of net sales, experienced a 12% jump versus the year-ago quarter. The company's second-biggest line, hip implants, also posted respectable growth of 8% for the quarter. 

The pullback in the share price is understandable, given previous expectations for Zimmer's Q4. However, the results for Q3 were solid, and the company as a whole has performed extremely well since it was spun off by Bristol-Myers Squibb (NYSE:BMY) back in 2001. The fact that Zimmer has repurchased about 2.4% of its outstanding common shares this year indicates that the company thinks shares are reasonably valued. While the fourth-quarter view had to be adjusted, I don't think this stock is in need of a wheelchair just yet.

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