Zimmer Biomet Currency Battle: Medical device manufacturer Zimmer Biomet Holdings Inc. had to adjust its annual revenue growth prediction due to a higher US currency. While its third-quarter results topped analysts’ projections, the company’s shares fell 3.8% in morning trading after falling 7% in October. The business seems most concerned about weight-loss medications’ expanding popularity.
However, Zimmer isn’t hitting the panic button just yet. They echo the sentiments of their industry peers like Johnson & Johnson, suggesting that these weight-loss drugs, known as GLP-1s, might actually increase the pool of patients eligible for orthopaedic surgeries in the long term. CEO Ivan Tornos chimed in during an earnings call, emphasising that once knee cartilage is damaged, there’s no miraculous recovery through weight loss alone.
On the financial front, Zimmer managed to exceed expectations. Adjusted earnings per share stood at $1.65, a pleasant surprise compared to the average analyst estimate of $1.60. This performance aligns with their larger peers like Abbott Laboratories and Boston Scientific, who also managed to beat quarterly profit estimates, thanks to reduced staffing shortages and a surge in hospital admissions for elective procedures that had been deferred during the pandemic.
Also Read: J and J Overhauls Orthopedic Division in Response to Medical Device Sales Slump
The shining star in Zimmer’s report was its knee unit, which posted a 7.5% increase in sales, reaching $706.3 million, outstripping analysts’ predictions. However, the hips unit wasn’t as fortunate, with sales of $465.3 million falling short of the estimated $481.7 million.
In terms of revenue, Zimmer reported a 5% increase for the third quarter, hitting $1.75 billion, aligning with the average estimates of analysts. Earlier, Zimmer had already signalled that its second and third-quarter revenue might be slightly lighter compared to the first quarter.
Despite the adjustments in their annual revenue growth forecast from 6.5% to 7.0% to 6% to 6.5%, Zimmer is standing by its full-year profit forecast of $7.47 to $7.57 per share. This move reflects their confidence in navigating the challenging currency waters and continuing to deliver value to their investors.
Our Reader’s Queries
What is Zimmer Biomet best known for?
Zimmer is a leading provider of orthopedic products, specializing in the design, development, manufacturing, and marketing of artificial joints for various body parts such as knees, hips, shoulders, elbows, feet, and ankles. Additionally, they also offer dental prostheses. With their expertise and commitment to quality, Zimmer is dedicated to improving the lives of those in need of orthopedic solutions.
What is the guidance for Zimmer Biomet 2023?
Zimmer Biomet has revised its 2023 revenue growth guidance, now projecting a range between 6% and 6.5%. This is a slight decrease from its previous projection of 6.5% to 7%. The company cited an increase in the expected impact of foreign currency exchange, which has been raised from 0.5% to 1%.
How much did Zimmer pay for Biomet?
In a major deal, Zimmer has agreed to pay Biomet shareholders a whopping $10.35 billion in cash and $3 billion in stock. As a result, Zimmer shareholders will own a majority stake of 84 percent in the newly combined company, while Biomet shareholders will own the remaining portion. This move is set to have a significant impact on the medical industry and is expected to bring about exciting new developments in the field.
What were the results of the Zimmer quarterly?
The latest quarterly earnings report has revealed some surprising figures. The fiscal quarter ending in September 2023 reported earnings per share of 1.65, while the June 2023 quarter reported 1.82. The March 2023 quarter saw earnings per share of 1.89, and the December 2022 quarter reported 1.88. These figures indicate a fluctuation in earnings over the past year, and will be of interest to investors and stakeholders alike.