By Mariam Sunny
(Reuters) -Zimmer Biomet Holdings on Tuesday raised its full-year profit forecast after beating second-quarter estimates on demand for its medical devices but shares fell more than 5% as investors focused on the company’s comments for 2024.
Expectations were high heading into the results following strong reports from Abbott Laboratories and Johnson & Johnson as a resumption of non-urgent procedures and easing staffing shortages at hospitals boosted demand.
“Revenue growth may look and feel normal, but the underlying dynamics are still not normal,” Zimmer CFO Suketu Upadhyay said in a post-earnings call.
The company said it expects backlog to remain the same or decrease going into 2024.
Combined sales at Zimmer’s hips and knees units rose 7% to $1.28 billion in the second quarter, compared to the average $1.21 billion estimated by four analysts according to Refinitiv data.
“The question is the degree to which this level of elevated US (joint reconstruction market) growth is sustainable into 2024,” Truist Securities analyst Richard Newitter said in a note.
Indiana-based Zimmer’s second-quarter revenue rose nearly 5% to $1.87 billion, beating analysts’ estimates of $1.83 billion.
The company now expects full-year profit of $7.47 to $7.57 per share, compared with its previous forecast of $7.40 to $7.50.
Excluding items, the company earned $1.82 per share, compared with estimates of $1.81.
(Reporting by Mariam Sunny in Bengaluru; Editing by Sriraj Kalluvila)