Zimmer Biomet Holdings Inc (ZBH.N) has adjusted its annual revenue growth forecast downward due to the strengthening of the dollar, despite exceeding third-quarter profit expectations in its knee unit.
In morning trading, the company’s shares declined by 3.8%, following a 7% decrease in October amid concerns within the industry regarding the rising popularity of weight-loss drugs.
Nevertheless, Zimmer has downplayed these concerns and aligned its stance with larger peers such as Johnson & Johnson (JNJ.N), suggesting that the weight-loss drugs, known as GLP-1s, may ultimately increase the number of patients eligible for orthopedic surgeries.
CEO Ivan Tornos emphasized that once knee cartilage is damaged, there is no natural recovery, and weight loss alone will not cure osteoarthritis.
On an adjusted basis, Zimmer reported a profit of $1.65 per share, surpassing analysts’ average estimate of $1.60, as per LSEG data.
Other major players in the industry, including Abbott Laboratories (ABT.N) and Boston Scientific (BSX.N), also exceeded quarterly profit expectations.
Their performance was boosted by the easing of staffing shortages and a surge in hospital admissions for elective procedures that were deferred during the pandemic.
Zimmer’s knees unit saw a 7.5% increase in sales, reaching $706.3 million, outpacing analysts’ estimates of $702.9 million.
This growth helped offset a shortfall in the hips unit, which achieved sales of $465.3 million compared to the estimated $481.7 million.
The company, headquartered in Indiana, reported a 5% rise in third-quarter revenue, reaching $1.75 billion, in line with analysts’ average projections.
Zimmer had previously stated its expectations of second- and third-quarter revenue being slightly lower than that of the first quarter.
The hip and knee implant manufacturer has revised its full-year reported revenue forecast, lowering it from a growth range of 6.5% to 7.0% to 6% to 6.5%, while maintaining its full-year profit projection of $7.47 to $7.57 per share.