Zimmer Biomet Q3 Earnings Top but Revenue Miss Causes Pre-Market Drop

Zimmer Biomet Holdings, Inc. ZBH posted third-quarter 2025 adjusted earnings per share (EPS) of $1.90, which beat the Zacks Consensus Estimate by 1.06%. The adjusted figure rose 9.2% year over year.The quarter’s adjustments included certain amortization, restructuring and other cost reduction initiatives, inventory and manufacturing-related charges and European Union Medical Device Regulation-related charges, among others.On a reported basis, the company registered earnings of $1.16 per share compared with $1.23 in the year-ago period.However, following the announcement, shares of ZBH declined 8.1% in pre-market trading today.ZBH's Q3 RevenuesThird-quarter net sales of $2.00 billion increased 9.7% (up 8.6% at constant exchange rate or CER) year over year. The figure missed the Zacks Consensus Estimate by 0.4%.ZBH's Revenues by GeographyDuring the third quarter, sales generated in the United States totaled $1.16 billion (up 10.6% year over year), while International sales grossed $837.3 million (up 8.5% year over year on a reported basis and 5.9% at CER).Our model projected revenues of $1.16 billion from the United States and $834 million from International.Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise Zimmer Biomet Holdings, Inc. price-consensus-eps-surprise-chart | Zimmer Biomet Holdings, Inc. QuoteSegmental Analysis of ZBH's RevenuesThe company currently reports under four product categories — Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) and Technology & Data, Bone Cement and Surgical.Sales in the Knees unit improved 5.3% year over year at CER to $792.4 million. Our model estimate was pegged at $820.5 million.Hipssales grew 3.8% year over year at CER to $506.2 million. Our model estimate was $512.2 million for the same.Revenues in the S.E.T. unit rose 18.2% year over year at CER to $541.5 million. Our model estimate was $498.3 million.Technology & Data, Bone Cement and Surgical(historically referred to as "Other") revenues rose 11.3% to $161.3 million at CER in the third quarter. Our model estimate was $166.5 million.ZBH's Margin PerformanceAdjusted gross margin, after excluding the impact of intangible asset amortization, was 72.1%, an expansion of 158 basis points (bps) year over year. Selling, general and administrative expenses rose 14.3% to $811.4 million. Research and development expenses rose 3.9% to $115.9 million. Adjusted operating margin expanded 27 bps to 25.7%.ZBH's Cash PositionZimmer Biomet exited the third quarter with cash and cash equivalents of $1.29 billion compared with $525.5 million at the end of the second quarter of 2025.Cumulative net cash provided by operating activities at the end of the third quarter was $1.18 billion compared with $993.1 million in the year-ago period.ZBH’s Updated 2025 OutlookZimmer Biomet updated its financial guidance for 2025.Reported revenue growth guidance was reiterated in the band of 6.7-7.7%. The upper limit of 2025 constant currency revenue growth was reduced. The new range is 6.2% - 6.7% (earlier range was 6.2% - 7.2%). The Zacks Consensus Estimate for revenues is pegged at $8.22 billion.Adjusted EPS guidance for the full year was reiterated in the range of $8.10-$8.30.The Zacks Consensus Estimate for 2025 adjusted EPS is pegged at $7.95.Our Take on ZBHDespite third-quarter 2025 adjusted EPS beating the Zacks Consensus Estimate and margin expansion, investors were likely disappointed by the overall performance, which was evident in the share price performance. Zimmer Biomet missed the Zacks Consensus Estimate on revenues and posted softer-than-expected performance in key categories like Knees and Hips (going by Zacks expectations). Further, while management reiterated full-year EPS guidance, the company trimmed the upper end of its constant-currency revenue growth outlook, signaling a more cautious demand environment ahead.ZBH's Zacks Rank and Key PicksZimmer Biomet currently has a Zacks Rank #3 (Hold).Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, IDEXX Laboratories IDXX and Boston Scientific BSX.Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company beat on earnings in each of the trailing four quarters, the average surprise being 14.28%.IDEXX, carrying a Zacks Rank #2 (Buy) at present, posted third-quarter 2025 adjusted EPS of $3.40, which exceeded the Zacks Consensus Estimate by 8.3%. Revenues of $1.11 billion topped the Zacks Consensus Estimate by 3.2%.IDXX has an estimated historical earnings growth rate of 14.9% compared with the industry’s 10.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 6.08%.Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report Zimmer Biomet Holdings, Inc. (ZBH): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks