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Zimmer Biomet Holdings, Inc. (ZBH - Free Report) posted first-quarter 2023 adjusted earnings per share (EPS) of $1.89, beating the Zacks Consensus Estimate by 13.9%. The adjusted figure improved 17.4% year over year.
The quarter’s adjustments included certain amortization, restructuring and European Union Medical Device Regulation-related charges, among others.
On a reported basis, the company registered earnings of $1.11 per share, a huge improvement from the year-ago earnings of 7 cents.
Revenue Details
First-quarter net sales of $1.83 billion increased 10.1% (up 13.2% at constant exchange rate or CER) year over year. The figure beat the Zacks Consensus Estimate by 7.6%.
Geographic Details
During the first quarter, sales generated in the United States totaled $1.06 billion (up 12.7% year over year at CER), while the same in International grossed $770.6 million (up 14% year over year at CER).
Segments
In terms of product categories, post the dental and spine arm sell-off, the company reports through the remaining four product categories.
Sales in the Knees unit improved 18.2% year over year at CER to $762.5 million. Hips recorded a 12.9% rise at CER to $492.8 million. Revenues in the S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) unit rose 6.4% year over year to $433.4 million.
Other revenues increased 11.1% to $142.3 million at CER.
Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise
Adjusted gross margin, after excluding intangible asset amortization, was 72.7%, reflecting an expansion of 271 basis points (bps) in the first quarter. Selling, general and administrative expenses were up 4.6% to $715.9 million. Research and development expenses rose 13.9% to $110.4 million. Adjusted operating margin expanded 456 bps to 27.5% in the quarter.
Cash Position
Zimmer Biomet exited the first quarter of 2023 with cash and cash equivalents of $330.2 million compared with $375.7 million at the end of 2022.
Cumulative net cash provided by operating activities at the end of the first quarter was $307.7 million compared with $315.7 million in the year-ago period.
2023 Guidance
Zimmer Biomet raised its financial guidance for 2023.
Revenue growth is now expected to be in the band of 5%-6% compared with 2022 (a significant increase from the earlier band of 1.5%-3.5%).
Adjusted EPS for the full year is expected in the range of $7.40-$7.50 ($6.95-$7.15 earlier).
The Zacks Consensus Estimate for 2023 adjusted earnings is pegged at $7.04 on revenues of $7.13 billion.
Our Take
Zimmer Biomet ended the first quarter of 2023 with better-than-expected earnings and revenues. Each of the company’s geographic segments and product divisions recorded strong year-over-year sales growth at CER. Management noted continued procedure recovery, solid execution and increasing traction around innovations in the reported quarter. Even amid the challenging macroeconomic conditions, expansion in the company’s adjusted gross and operating margins is encouraging. The raised 2023 guidance is an indication of the strong growth momentum to continue through the year.
Zacks Rank and Other Key Picks
Zimmer Biomet currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched estimates in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 1.9%.
Johnson & Johnson reported a first-quarter 2023 adjusted EPS of $2.68, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. The company currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.
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Zimmer Biomet (ZBH) Q1 Earnings Beat Estimates, View Raised
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) posted first-quarter 2023 adjusted earnings per share (EPS) of $1.89, beating the Zacks Consensus Estimate by 13.9%. The adjusted figure improved 17.4% year over year.
The quarter’s adjustments included certain amortization, restructuring and European Union Medical Device Regulation-related charges, among others.
On a reported basis, the company registered earnings of $1.11 per share, a huge improvement from the year-ago earnings of 7 cents.
Revenue Details
First-quarter net sales of $1.83 billion increased 10.1% (up 13.2% at constant exchange rate or CER) year over year. The figure beat the Zacks Consensus Estimate by 7.6%.
Geographic Details
During the first quarter, sales generated in the United States totaled $1.06 billion (up 12.7% year over year at CER), while the same in International grossed $770.6 million (up 14% year over year at CER).
Segments
In terms of product categories, post the dental and spine arm sell-off, the company reports through the remaining four product categories.
Sales in the Knees unit improved 18.2% year over year at CER to $762.5 million. Hips recorded a 12.9% rise at CER to $492.8 million. Revenues in the S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) unit rose 6.4% year over year to $433.4 million.
Other revenues increased 11.1% to $142.3 million at CER.
Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise
Zimmer Biomet Holdings, Inc. price-consensus-eps-surprise-chart | Zimmer Biomet Holdings, Inc. Quote
Margins
Adjusted gross margin, after excluding intangible asset amortization, was 72.7%, reflecting an expansion of 271 basis points (bps) in the first quarter. Selling, general and administrative expenses were up 4.6% to $715.9 million. Research and development expenses rose 13.9% to $110.4 million. Adjusted operating margin expanded 456 bps to 27.5% in the quarter.
Cash Position
Zimmer Biomet exited the first quarter of 2023 with cash and cash equivalents of $330.2 million compared with $375.7 million at the end of 2022.
Cumulative net cash provided by operating activities at the end of the first quarter was $307.7 million compared with $315.7 million in the year-ago period.
2023 Guidance
Zimmer Biomet raised its financial guidance for 2023.
Revenue growth is now expected to be in the band of 5%-6% compared with 2022 (a significant increase from the earlier band of 1.5%-3.5%).
Adjusted EPS for the full year is expected in the range of $7.40-$7.50 ($6.95-$7.15 earlier).
The Zacks Consensus Estimate for 2023 adjusted earnings is pegged at $7.04 on revenues of $7.13 billion.
Our Take
Zimmer Biomet ended the first quarter of 2023 with better-than-expected earnings and revenues. Each of the company’s geographic segments and product divisions recorded strong year-over-year sales growth at CER. Management noted continued procedure recovery, solid execution and increasing traction around innovations in the reported quarter. Even amid the challenging macroeconomic conditions, expansion in the company’s adjusted gross and operating margins is encouraging. The raised 2023 guidance is an indication of the strong growth momentum to continue through the year.
Zacks Rank and Other Key Picks
Zimmer Biomet currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched estimates in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 1.9%.
Johnson & Johnson reported a first-quarter 2023 adjusted EPS of $2.68, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. The company currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.