Zimmer Biomet stock tumbled Monday after the medical devices maker blamed the Covid pandemic for light fourth-quarter earnings and 2022 guidance.
The main focus is likely to be guidance, Evercore ISI analyst Vijay Kumar said in a report to clients. For the year, Zimmer Biomet expects to earn $6.40-$6.80 per share, minus some items. That would fall about 8% from pre-pandemic levels and was well below analysts' call for $7.93.
Revenue is also expected to be $6.69 billion at the midpoint, another decline and miss.
Chief Executive Bryan Hanson addressed the challenges in a written statement. Zimmer Biomet makes orthopedic devices, like hip and knee replacements. But patients have delayed elective procedures to limit their exposure to Covid. Also, many hospitals are short-staffed as they deal with sick workers.
"As expected, the ongoing Covid pandemic continued to pressure our business in (the fourth quarter)," he said. "The quarter was particularly impacted throughout December due to hospital staffing shortages and the omicron variant surge worldwide."
On today's stock market, Zimmer Biomet stock toppled 9.1% to 111.67.
Zimmer Biomet Stock: Earnings Lackluster
During the fourth quarter, adjusted Zimmer Biomet earnings were $1.95 per share. Earnings fell nearly 8% year over year and lagged forecasts by 3 pennies.
Sales crept down more than 2% to $2.04 billion. Zimmer Biomet stock analysts expected $2.07 billion.
The biggest decline was for Zimmer Biomet's segment that treats sports medicine, extremities, trauma, skull and thoracic conditions. Sales fell nearly 6% to $410.5 million. That widely missed forecasts for $458 million in sales, Kumar said.
Meanwhile, the knees segment brought in $720.1 million, slipping 0.8%. But that easily topped views for $708 million. Sales of new hips declined 4.6% to $480.7 million, but were in line. Dental and spine sales generated $260.7 million, down 4.1%. Zimmer is spinning off that business and calling it ZimVie.
Kumar kept his outperform rating on Zimmer Biomet stock.
But in morning action, shares hit their lowest point since June 2020.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
