Zimmer Biomet
(NYSE: ZBH)
today reported second-quarter results that beat Wall Street’s analysts’ expectations, again upping its guidance for the year.
“We’re pretty happy about the results we get to discuss today,” CEO Bryan Hanson told analysts. He added that the Warsaw, Indiana–based orthopedic device giant achieved its results in the face of significant macroeconomic challenges affecting the entire market.
The Q2 beat, however, may have not been enough for The Street. ZBH shares were down more than 5% to $130.71 apiece in morning trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.
Truist analysts Richard Newitter, Samuel Brodovsky and Lin Zhang thought the Q2 results were good but “might not be enough on elevated ‘utilization’ expects.”
Zimmer Biomet earned nearly $210 million, or $1 per share, on nearly $1.870 billion in sales for the quarter ending on June 30, 2023. The results represented a bottom-line boost of 36% and a top-line gain of 5% compared with Q2 2022.
Adjusted to exclude one-time items, ZB had Q2 earnings per share of $1.82. That’s a penny ahead of the $1.81 per share expected by Wall Street analysts, who also predicted $1.82 billion in sales.
More about Zimmer Biomet’s results
Zimmer Biomet officials acknowledged that inflation, interest rates, supply chain backlogs, added Russia sanctions involving medical devices, and more still present challenges. At the same time, ZB is pushing innovation and better execution — at the same time that elective procedures at health providers have recovered from the pandemic and younger people opt for orthopedic procedures.
Hanson noted that Zimmer Biomet has 40 planned product launches between this year and the end of 2025, the majority in 4%-plus growth markets. For example, ZB officials said they plan a full market release of their Persona IQ smart knee implant by Q1 2024, and they still expect to be first-to-market with a robotic shoulder surgery application with their Rosa platform.
“The goal is to continue to enhance our growth profile through our ongoing focus on active portfolio management, and that is supported by our already strong and strengthening balance sheet,” Hanson said.
Zimmer Biomet now expects revenue growth of 6.5–7.0% and adjusted EPS of $7.47–7.57 this year, up from previous guidance of 5.0–6.0% and $7.40–7.50, respectively.