Biomet Inc. reported Thursday sluggish fiscal second-quarter sales that indicated a struggling orthopedics market hurt by the economic downturn isn't yet in recovery mode.

Shares of Biomet's publicly traded rivals were lower in the wake of Biomet's report, with Zimmer Holdings Inc. (ZMH) recently down 3% at $52.68 and Stryker Corp. (SYK) 1.4% lower at $53.89. Biomet is smaller and its fiscal quarters end a month earlier than usual, but its results are closely watched for early clues about the market's condition.

In this case, Biomet reported flat hip sales and a 3% increase in knee sales for the quarter ended Nov. 3, excluding the impact of currency rates, down from growth rates seen in the prior three-month period. U.S. hip-and-knee sales slowed to 2% growth from 5% growth in the quarter ending Aug. 31.

The market may rebound at some point, as the companies expect. "But we're going to have to wait a little bit longer," Jefferies & Co. analyst Raj Denhoy said.

JPMorgan analyst Michael Weinstein said the results reinforce his firms' recent survey work indicating that market conditions continued to weaken during autumn. Among other replacement joint makers, Smith & Nephew PLC (SNN) recently traded down 1.9% at $51.13 while Wright Medical Group Inc. (WMGI) was down 1.3% at $15.99.

The orthopedics market has shown some economic vulnerability. Replacement hips and knees address painful, arthritic problems with original parts, but the procedures can be deferred by patients worried about out-of-pocket costs or long stretches off work for recovery.

"We believe that market growth rates for orthopedic reconstructive products continued to be depressed in the quarter," Jeffrey Binder, Biomet's president and chief executive, said in a release. "However, an improving economy, favorable demographics and product innovation should stimulate long‐term market growth, and we continue to make significant research and development investments to address unmet clinical needs across our business."

For the quarter ended Nov. 30, Biomet's loss widened to $7.6 million from $7.2 million a year earlier. Excluding items such as costs related to the buyout, it reported a profit of $66 million, down from $74.8 million. Net sales slipped 0.4% to $698.3 million, but were up 2% excluding currency effects.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

--Matt Jarzemsky contributed to this article.
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