Argus downgrades Zimmer Biomet
Declining sales and the supply & manufacturing issues that have bedeviled Zimmer Biomet (NYSE:ZBH) recently prompted an Argus analyst to downgrade the orthopedic giant’s stock today.
Argus analyst David Toung moved ZBH shares from a “buy” to a “hold” rating based on the company’s estimate that it would be the second quarter before it returned to full inventory levels. But the FDA in February released a Form 483 sent to Zimmer Biomet that flagged issues found during an inspection of a former Biomet plant in Warsaw, Ind., last year, laying out eight observations it determined need correction at the facility. The federal safety watchdog’s 12-page document covered a number of issues the agency had noted during prior inspections.
And although the company managed to beat both the consensus forecast and its own guidance with its first-quarter results, it also posted a more than 40% profit slide.
Profits were $174.7 million, or 85¢ per share, on sales of $2.02 billion for the three months ended March 31, for a bottom-line slide of -41.6% on sales growth of 2.3%.
Adjusted to exclude one-time items, earnings per share were $1.91, 2¢ ahead of Wall Street, where analysts were looking for revenues of $1.98 billion; Zimmer’s own guidance had called for adjusted EPS of $1.84 to $1.91 on sales of $1.96 billion to $2.0 billion.
“We are concerned that customers, who are typically orthopedic surgeons and the hospitals they work at, are...
Source: Mass Device - Category: Medical Devices Authors: Brad Perriello Tags: Orthopedics Wall Street Beat zimmerbiomet Source Type: news