ZBH gets no respect on strong financials and 2024 outlook
Embarking on a path of financial fortitude, Zimmer Biomet Holdings, Inc. (ZBH) unveiled its financial achievements for the fourth quarter and the entirety of 2023, marking significant strides with a 6.3% and 6.5% year-over-year net sales increase, respectively. This financial upsurge is attributed to a compelling growth momentum observed in the latter half of the year, alongside optimistic financial projections for 2024.
The company's fourth-quarter net sales soared to $1.940 billion, showcasing a 6.3% elevation over the prior year, and a 6.1% uptick on a constant currency basis. The annual narrative was equally impressive with net sales hitting $7.394 billion, reflecting a 6.5% year-over-year increment and a 7.5% rise on a constant currency basis.
Zimmer Biomet's fiscal narrative was accentuated by robust second-half growth dynamics, culminating in fourth-quarter net earnings of $419.2 million, or $458.1 million when adjusted. The yearly net earnings were reported at $1.024 billion, or $1.584 billion on an adjusted scale.
Ivan Tornos, President, and CEO of Zimmer Biomet, lauded the company's fiscal journey, attributing the laudable outcomes to steadfast execution and a vigorous growth trajectory in the latter half of the year. With an optimistic gaze towards 2024, Tornos reaffirmed the company's commitment to driving stakeholder value, underscored by an unwavering dedication to fostering people and culture, achieving operational excellence, and catalyzing innovation and diversification.
In the same vein, Zimmer Biomet heralded the introduction of HAMMR, an innovative automated Hip Impaction System, and consummated a $500 million share repurchase endeavor. These initiatives mirror the company's dedication to pioneering advancements and enriching shareholder value.
In a strategic move, Zimmer Biomet embarked on a global restructuring program in the waning months of 2023, aimed at refining its cost structure and enhancing operational efficiencies. This strategic overhaul is poised to engender approximately $200 million in cost savings by the close of 2025, bolstering the company's growth and profitability.
Projected into 2024, Zimmer Biomet's financial guidance anticipates a reported revenue change of 4.5% to 5.5% and an adjusted diluted EPS ranging between $8.00 and $8.15. This forward-looking stance is indicative of the company's optimistic outlook and its anticipated sustained growth trajectory.
In sum, Zimmer Biomet Holdings, Inc. has unveiled a compelling financial narrative for the fourth quarter and the full year of 2023, buoyed by significant growth in the latter half of the year. With a buoyant financial forecast for 2024, the company is primed for continued success, underpinned by a commitment to innovation, shareholder enrichment, and operational excellence, cementing its position in the medical devices and instruments sector.
Nonetheless, shares of ZBH are trading down 5% in reaction to test the rising 50-day moving average. Note, ZBH shares rallied 20% higher over the past two months into the print.