UPDATE 2-Synthes sees low growth in 2010 after weak Q4

* 2009 net profit $824 million vs $791 million forecast

* Revenue growth slows in Q4 on weak U.S., European demand

* Sees single-digit growth in 2010

* 2 brokers cut rating

* Shares down 5 pct, biggest faller in health care sector

(adds analysts’ comments, share price, background)

ZURICH, Feb 17 (BestGrowthStock) – Swiss medical device maker
Synthes Inc (SYST.VX: ) said revenue growth is likely to remain in
single digits this year as hospitals cut costs, after the lowest
growth for years in the fourth quarter.

Synthes’ shares were down 5 percent at 128.51 Swiss francs
by 0929 GMT on Wednesday, making it the largest loser in the Dow
Jones European health care sector index (.SXDP: ) as at least two
brokers cut their ratings for the stock.

The maker of nails, screws and plates to fix broken bones
missed its own 2009 forecast for low double-digit revenue growth
for the first time in years as it reported a 9 percent rise in
sales, when stripping out currency effects.

Synthes, which also makes artificial spine discs, said
revenue growth slowed to 4.7 percent in the fourth quarter,
largely in line with competitors such as Biomet or Johnson &
Johnson’s medical devices unit.

“Since we have been covering Synthes (1998), we have seen no
quarter with such a low growth pattern,” Helvea analyst Daniel
Jelovcan said in a note. “This is astonishing and will act as a
drag on the share price.”

Synthes had pleased investors with double-digit revenue
growth for years.

Brokerage Kepler cut its rating on Synthes stock to reduce
from buy and ZKB lowered the stock to market weight from
overweight.

“The expectations on have been very high and it is now going
to be very hard to meet them,” ZKB analyst Sibylle Bischofberger
said.

FEWER FRACTURES

Revenue growth should pick up from the fourth quarter but
was likely to remain in single digits, Synthes’ spokesman
Gilgian Eisner said, despite a harsh winter giving the company a
good start to the year.

“The economic crisis has shown effects,” and conditions are
still tough Eisner said. Hospitals are cutting costs, activity
in industries with high accident risk such as construction has
reduced and people have cut back on driving or sports that could
lead to accidents requiring treatment with Synthes products.

“The harsh winter has had a positive effect (on Synthes
business) in Europe at the beginning of 2010,” he added.

Analysts have said companies such as Synthes should have had
a good start to 2010 as the prolonged cold snap across Europe
and North America led to a surge in fractures caused by falls
and road accidents, boosting demand for orthopaedic trauma
products used to fix broken bones.[ID:nLDE60A12Z]

Synthes’ spine business, which is still trailing
competitors, was also hit by the recall of its Synex-II product
in North America.

“We are not satisfied with the fourth quarter top line
growth; however, we are encouraged by the higher growth rate in
early 2010,” Synthes Chief Executive Michel Orsinger said in a
statement.

The world’s market leader in trauma business reported
full-year net profit of $824 million for 2009, beating analysts’
average forecast of $791 million.

Synthes, which is majority owned by its chairman Hansjoerg
Wyss, increased its dividend by 23 percent to 1.35 Swiss francs
per share.

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(Reporting by Sven Egenter and Oliver Hirt; Editing by Erica
Billingham)

UPDATE 2-Synthes sees low growth in 2010 after weak Q4