Medical device maker Zimmer cuts revenue growth forecast as profit beats

(Reuters) -Zimmer Biomet Holdings Inc on Tuesday trimmed its annual revenue growth forecast due to a stronger dollar after topping analysts' estimates for third-quarter profit on robust performance in the medical device maker's knee unit.

Shares of the company fell 3.8% in morning trading after declining about 7% in October on industry-wide concerns over the impact of the soaring popularity of weight-loss drugs.

However, Zimmer played down such concerns and echoed comments from larger peers like Johnson & Johnson that the weight-loss drugs, known as GLP-1s, could help more patients become eligible for orthopedic surgeries in the longer term.

"Once the (knee) cartilage is damaged, there is no recovery...And a drop in weight is not going to cure osteoarthritis," CEO Ivan Tornos said on an earnings call.

On an adjusted basis, the company reported a profit of $1.65 per share, compared with analysts' average estimate of $1.60, according to LSEG data.

Larger peers Abbott Laboratories and Boston Scientific had also topped quarterly profit estimates on easing staffing shortages and a surge in hospital admissions for elective procedures deferred during the pandemic.

Sales at Zimmer's knees unit rose 7.5% to $706.3 million, compared to analysts' estimate of $702.9 million. That helped cushion a miss at its hips unit, where sales of $465.3 million compared with estimates of $481.7 million.

The Indiana-based company's third-quarter revenue rose 5% to $1.75 billion, in line with analysts' average estimates.

Zimmer had said earlier that it expects second- and third-quarter revenue to be a "little bit lighter" compared to the first quarter.

The hip and knee implant maker cut its full-year reported revenue forecast to a growth of 6% to 6.5% from 6.5% to 7.0% earlier while backing its full-year profit forecast of $7.47 to $7.57 per share.

(Reporting by Christy Santhosh in Bengaluru; Editing by Sriraj Kalluvila)