UPDATE 4-Zimmer profit falls 16 pct, beats Street view

* Q1 adjusted shr $0.95 vs $0.94 estimate

* Sales drop more than 6 pct; co sees rebound in H2 (Adds analyst comment, byline, updates stock price)

By Debra Sherman

CHICAGO, April 23 (Reuters) - Orthopedic device maker Zimmer Holdings Inc (ZMH.N: Quote, Profile, Research) reported a smaller-than-expected 16 percent drop in quarterly net earnings and reaffirmed its financial outlook for 2009, giving the stock a boost in an otherwise weaker market.

Zimmer, which also makes dental implants and devices used in trauma, said first-quarter earnings were $202.2 million, or 91 cents per share, compared with $239.3 million, or $1.02 per share, a year before.

Adjusted earnings per share were 95 cents, a penny better than the average estimate on Wall Street, according to Reuters Estimates.

Quarterly sales were down 6 percent to $992.6 million, with sales declining in all product categories except trauma, reflecting continued share losses in its key markets for hips, knees and spine.

Zimmer repeated its forecast, calling for adjusted diluted earnings per share of $3.85 to $4.00, with revenue up between 1 percent and 3 percent.

Adjusted diluted earnings per share are expected to show negative growth in the second and third quarters and positive growth in the fourth quarter. Revenue is expected to be flat in the second quarter and improve in the second half. Assuming foreign currency exchange rates remain at current levels, the company estimates that translations will cut revenue 4 percent for the year.