Zimmer Biomet (NYSE:ZBH) shares ticked up today on first-quarter results ahead of the consensus forecast, with ZB upping its 2022 forecast.
The Warsaw, Indiana–based company posted profits of $14.2 million, or 7¢ per share, on sales of $1.7 billion for the three months ended March 31, 2022, for a 92.8% bottom-line slide on sales growth of 3.9%.
Adjusted to exclude one-time items, earnings per share were $1.61, 20¢ ahead of Wall Street, where analysts were looking for sales of $1.6 billion.
Zimmer Biomet also completed the previously announced spinoff of ZimVie — its former dental and spine businesses.
“We are encouraged by the better than expected results seen in Q1, driven by COVID recovery and continued execution by the Zimmer Biomet team. This performance increases our confidence level for 2022 and we are raising and tightening our guidance accordingly,” Zimmer Biomet Chair, President and CEO Bryan Hanson said in a news release. “Our underlying business remains strong, fueled by innovation in our portfolio and an acceleration of our transformation activities. I continue to be proud of how the Zimmer Biomet team is executing against our mission so that we can serve healthcare providers and their patients while delivering value for shareholders.”
Zimmer Biomet said it now expects to log adjusted annual EPS of between $6.65 and $6.85, compared with a range of $6.40 to $6.80 previously. The company projects revenue change between a decrease of 1.5% and an increase of 0.5%, marking an improvement on the previous guidance ranging between a decrease of 4% to a 0% change.
BTIG analyst Ryan Zimmerman wrote in a report that the expectation for Zimmer Biomet through the remainder of the year is for growth to come in below this quarter, despite positive results, as competitors become increasingly tougher and costs remain from the ZimVie spinout.
Zimmerman said inflationary pressures, raw material increases and ramped up spending could constrain Zimmer Biomet’s leverage and adjusted EPS growth into fiscal 2023. The analyst maintains his “Neutral” rating.
ZBH shares were up slightly at $121.74 apiece near the close of trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was also up a bit.