Implant maker Zimmer Biomet lowers full-year profit forecast
Oct 30 (Reuters) -Hip implant maker Zimmer Biomet ZBH.N lowered its annual profit forecast on Wednesday following last month's disruptions to a software platform that was managing some of the company's operations.
Zimmer Biomet said in September it had to replace its enterprise resource planning (ERP) system due to "usual glitches". The system was used to manage the company's day-to-day business activities, including accounting and supply chain operations.
The cut to the company's profit forecast comes amid heightened investor expectations around medical device makers' financials in recent quarters as more people, especially older Americans, opt for non-urgent surgeries such as hip and knee replacements.
Zimmer Biomet now expects 2024 adjusted profit between $7.95 and $8.05 per share, down from its prior forecast range of $8.00 to $8.15 per share.
It also forecast annual revenue to grow between 3.5% and 4%, versus its previous range of 4% to 5%.
The company had previously said that it expects the ERP software issues to hit revenue by 1% this year, with more than half of its effect coming in the third quarter.
Zimmer Biomet reported revenue of $1.82 billion in the third quarter, compared with the average analyst estimate of $1.80 billion, according to data compiled by LSEG.
Baird analyst Jeff Johnson said the company's revenue growth slowed by 1.5% mainly due to the ERP software issues.
Quarterly sales at Zimmer's unit which sells knee implants rose 5.5% to $745.1 million, while sales at its hip implant unit increased 3.5% to $481.5 million.
Peer Stryker Corp SYK.N on Tuesday raised its annual profit forecast betting on robust demand for its hip and knee implants.
On an adjusted basis, Zimmer Biomet earned $1.74 per share in the third quarter, in line with estimates.
Reporting by Puyaan Singh in Bengaluru; Editing by Shounak Dasgupta
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