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Zimmer raises sales forecast despite slower knee business

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Zimmer raises sales forecast despite slower knee business

CEO Ivan Tornos did not attribute the company’s performance in knees to a broader market slowdown, as competitor Stryker did last week.

Orthopedics firm Zimmer Biomet raised its sales forecast for the year, despite reporting slower than expected sales of knee implants.

Following competitor Stryker’s earnings readout last week, where the company attributed lower than expected hip and knee sales to a broader slowdown stemming from affordability and insurance challenges, Zimmer’s results left analysts questioning the state of the orthopedics market.

The company reported knee sales of $767.5 million in the third quarter, a 3.1% decrease year over year. However, the company’s hip sales grew by 6% to $536.5 million.

CEO Ivan Tornos, on a Wednesday earnings call, rejected the idea of a market slowdown, noting that the company’s hip business grew in the quarter, and attributing the company’s performance in knees to commercial execution. Zimmer has been going through a salesforce transition, where the company is shifting to a fully dedicated salesforce. That process and a competitive knee implant market affected sales in the quarter, the CEO said.

Tornos also said procedures in ambulatory surgery centers are growing, and pricing and cancellation rates have been steady.

“We're not ready to call it a market slowdown,” Tornos said. “We’ve got work to do around commercial execution, and that's what we're going to focus on.”

P. Morgan analyst Robbie Marcus wrote in a research note on Wednesday.



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