We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zimmer Biomet (ZBH) Q4 Earnings Top Estimates, Margins Grow
Read MoreHide Full Article
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) posted fourth-quarter 2023 adjusted earnings per share (EPS) of $2.20, exceeding the Zacks Consensus Estimate by 2.3%. The adjusted figure increased 17% 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 $2.01 per share, which reflected a significant improvement from the year-ago loss of 62 cents per share.
Full-year 2023 adjusted earnings came in at $7.55 per share, a 9.6% rise from the 2022 level. The figure also exceeded the Zacks Consensus Estimate by 0.5%.
Revenue Details
Fourth-quarter net sales of $1.94 billion increased 6.3% (up 6.1% at constant exchange rate or CER) year over year. The figure beat the Zacks Consensus Estimate by 0.5%.
Full-year total revenues of $7.39 billion increased 6.5% (up 7.5% at constant exchange rate or CER) from 2022.
Geographic Details
During the fourth quarter, sales generated in the United States totaled $1.13 billion (up 4.4% year over year), while International sales grossed $811.9 million (up 8.7% year over year at CER).
Our model projected 3.1% revenue growth for the United States and 9.4% growth at CER for the International arm in the fourth quarter.
Segments
In terms of product categories, post the dental and spine arm sell-off, the company reports through the remaining four product categories — Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) and Other.
Sales in the Knees unit improved 5.6% year over year at CER to $798.3 million. Our model estimate was pegged at $788.6 million.
Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise
Hips recorded 3.6% growth in the fourth quarter at CER to reach $504.8 million. Our model estimate was $524 million for the same.
Revenues in the S.E.T. unit were up 6.4% year over year at CER to $453.3 million. Our model estimate was $442 million.
Other revenues increased 15.9% to $183.7 million at CER in the fourth quarter. Our model estimate was $173.1 million.
Margins
Adjusted gross margin, after excluding the impact of intangible asset amortization, was 72.2%, reflecting an expansion of 74 basis points (bps) in the fourth quarter. Selling, general and administrative expenses dropped 0.7% to $722.3 million. Research and development expenses rose 4.9% to 113.3 million. Adjusted operating margin expanded 342 bps to 29.2% in the quarter.
Cash Position
Zimmer Biomet exited 2023 with cash and cash equivalents of $415.8 million compared with $375.7 million at the end of 2022.
Cumulative net cash provided by operating activities at the end of the fourth quarter was $1.58 billion compared with $1.36 billion in the year-ago period.
2024 Guidance
Zimmer Biomet provided its financial guidance for 2024.
Reported revenue growth is expected to be in the band of 4.5%-5.5% year over year. The company currently expects foreign exchange to have an adverse impact of 0.5% on revenues.
Adjusted EPS for the full year is expected in the range of $8.00-$8.15.
The Zacks Consensus Estimate for 2024 adjusted earnings is pegged at $7.95 on revenues of $7.70 billion.
Our Take
Zimmer Biomet ended the fourth quarter of 2023 on a bright note, with earnings and revenue beat. Each of the company’s geographic segments recorded strong year-over-year sales growth on a reported basis, as well as at CER. The company’s business segments, too, reported strong growth on a CER basis. Management noted solid execution, including a healthy second-half growth profile. Even amid the challenging macroeconomic conditions, the company’s adjusted gross and operating margins improved.
However, the warning letter issued by the FDA following its previous inspections of the company’s Warsaw North Campus facility raises concern.
Zacks Rank and Key Picks
Zimmer Biomet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Haemonetics (HAE - Free Report) and McKesson (MCK - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 10.9% for 2025. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Haemonetics, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted EPS of 99 cents, which beat the Zacks Consensus Estimate by 5.3%. For the third quarter, revenues are expected to increase 5.6% year over year.
HAE has an estimated fiscal 2024 earnings growth rate of 28.4% compared with the industry’s 17.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 16.1%.
Mckesson reported third-quarter fiscal 2023 adjusted earnings of $6.90, beating the Zacks Consensus Estimate by 8.8%. For the fourth quarter, revenues are expected to increase 9.9% year over year. It currently carries a Zacks Rank #2.
MCK has an estimated earnings growth rate of 14% for fiscal 2025 compared with the industry’s 13.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.9%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zimmer Biomet (ZBH) Q4 Earnings Top Estimates, Margins Grow
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) posted fourth-quarter 2023 adjusted earnings per share (EPS) of $2.20, exceeding the Zacks Consensus Estimate by 2.3%. The adjusted figure increased 17% 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 $2.01 per share, which reflected a significant improvement from the year-ago loss of 62 cents per share.
Full-year 2023 adjusted earnings came in at $7.55 per share, a 9.6% rise from the 2022 level. The figure also exceeded the Zacks Consensus Estimate by 0.5%.
Revenue Details
Fourth-quarter net sales of $1.94 billion increased 6.3% (up 6.1% at constant exchange rate or CER) year over year. The figure beat the Zacks Consensus Estimate by 0.5%.
Full-year total revenues of $7.39 billion increased 6.5% (up 7.5% at constant exchange rate or CER) from 2022.
Geographic Details
During the fourth quarter, sales generated in the United States totaled $1.13 billion (up 4.4% year over year), while International sales grossed $811.9 million (up 8.7% year over year at CER).
Our model projected 3.1% revenue growth for the United States and 9.4% growth at CER for the International arm in the fourth quarter.
Segments
In terms of product categories, post the dental and spine arm sell-off, the company reports through the remaining four product categories — Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) and Other.
Sales in the Knees unit improved 5.6% year over year at CER to $798.3 million. Our model estimate was pegged at $788.6 million.
Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise
Zimmer Biomet Holdings, Inc. price-consensus-eps-surprise-chart | Zimmer Biomet Holdings, Inc. Quote
Hips recorded 3.6% growth in the fourth quarter at CER to reach $504.8 million. Our model estimate was $524 million for the same.
Revenues in the S.E.T. unit were up 6.4% year over year at CER to $453.3 million. Our model estimate was $442 million.
Other revenues increased 15.9% to $183.7 million at CER in the fourth quarter. Our model estimate was $173.1 million.
Margins
Adjusted gross margin, after excluding the impact of intangible asset amortization, was 72.2%, reflecting an expansion of 74 basis points (bps) in the fourth quarter. Selling, general and administrative expenses dropped 0.7% to $722.3 million. Research and development expenses rose 4.9% to 113.3 million. Adjusted operating margin expanded 342 bps to 29.2% in the quarter.
Cash Position
Zimmer Biomet exited 2023 with cash and cash equivalents of $415.8 million compared with $375.7 million at the end of 2022.
Cumulative net cash provided by operating activities at the end of the fourth quarter was $1.58 billion compared with $1.36 billion in the year-ago period.
2024 Guidance
Zimmer Biomet provided its financial guidance for 2024.
Reported revenue growth is expected to be in the band of 4.5%-5.5% year over year. The company currently expects foreign exchange to have an adverse impact of 0.5% on revenues.
Adjusted EPS for the full year is expected in the range of $8.00-$8.15.
The Zacks Consensus Estimate for 2024 adjusted earnings is pegged at $7.95 on revenues of $7.70 billion.
Our Take
Zimmer Biomet ended the fourth quarter of 2023 on a bright note, with earnings and revenue beat. Each of the company’s geographic segments recorded strong year-over-year sales growth on a reported basis, as well as at CER. The company’s business segments, too, reported strong growth on a CER basis. Management noted solid execution, including a healthy second-half growth profile. Even amid the challenging macroeconomic conditions, the company’s adjusted gross and operating margins improved.
However, the warning letter issued by the FDA following its previous inspections of the company’s Warsaw North Campus facility raises concern.
Zacks Rank and Key Picks
Zimmer Biomet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Haemonetics (HAE - Free Report) and McKesson (MCK - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 10.9% for 2025. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Haemonetics, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted EPS of 99 cents, which beat the Zacks Consensus Estimate by 5.3%. For the third quarter, revenues are expected to increase 5.6% year over year.
HAE has an estimated fiscal 2024 earnings growth rate of 28.4% compared with the industry’s 17.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 16.1%.
Mckesson reported third-quarter fiscal 2023 adjusted earnings of $6.90, beating the Zacks Consensus Estimate by 8.8%. For the fourth quarter, revenues are expected to increase 9.9% year over year. It currently carries a Zacks Rank #2.
MCK has an estimated earnings growth rate of 14% for fiscal 2025 compared with the industry’s 13.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.9%.