Zimmer Biomet
(NYSE: ZBH)
shares are down slightly on first-quarter results that beat the consensus forecast.
The Warsaw, Indiana–based orthopedics device company reported profits of $172.8 million for the three months ended March 31, 2024. That amounts to 84¢ per share on sales of $1.89 billion for the quarter.
Zimmer Biomet recorded a bottom-line decrease of nearly 26% from net income of $232.5 million in the same period last year. It posted sales growth of 3% year-over-year.
Adjusted to exclude one-time items, earnings per share totaled $1.94, landing 7¢ ahead of Wall Street projections. Zimmer Biomet exceeded expectations of $1.87 billion in revenue.
“We are very pleased with the execution, progress and strong performance the team delivered in the first quarter,” Zimmer Biomet President and CEO Ivan Tornos said in a news release. “As we move forward, we are focused on continuing this momentum and delivering on our key priorities to advance people and culture, achieve operational excellence and drive innovation and diversification – all with the goal of delivering on our mission.”
Zimmer Biomet maintained its previous full-year 2024 guidance of revenue growth between 4.5% and 5.5%, and adjusted EPS between $8 and $8.15.
Shares of ZBH shares were down by 1% to around $118 apiece in afternoon trading. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up nearly 4%.
Tornos said the restructuring program announced three months ago “has now been implemented almost entirely with no major disruptions to report.”
“We have realized substantial benefits for this initiative, including realizing cost savings earlier than initially expected, as well as achieving increased operational agility and enhanced accountability,” he said, according to a SeekingAlpha transcript of today’s earnings call.
Tornos also announced that Chief Communications and Administration Officer Keri Mattox “has made a decision to depart from Zimmer Biomet at the end of May.”
“Keri has been a trusted partner and a very close collaborator and friend on this journey, and has enabled great things for Zimmer Biomet in her four-plus years here with ZB,” Tornos continued. “She’s going to be missed and we wish her the best in her future endeavors. A search for a head of IR position is in progress with a leading executive search firm and we hope to announce Keri’s replacement here very soon.”
What analysts think of Zimmer Biomet’s Q1
Needham & Co. maintained its Hold rating on Zimmer Biomet shares, with Senior Research Analyst Mike Matson offering a perspective similar to his view of Zimmer Biomet’s Q4.
“We continue to expect the orthopedic market to return to its typical 3-4% growth rate, potentially as soon as 2H24,” Matson said in a note to clients. “Even if ZBH’s growth is slightly higher, we think its earnings leverage will be limited. And ZBH seems likely to pursue M&A which could be dilutive and cause another headwind to earnings growth.”
