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Zimmer Biomet Fourth-Quarter Earnings, Revenue Slide But Top Views as Spine, Dental Business Spin-Off Eyed

· 02/05/2021 06:13

10:59 AM EST, 02/05/2021 (MT Newswires) -- Zimmer Biomet (ZBH) reported fourth-quarter earnings that slid year-on-year but still topped analysts' expectations as the orthopedic joint maker saw a drop in surgeries from the COVID-19 pandemic, while it also said it would spin out its spine and dental products business.

The company reported fiscal fourth-quarter adjusted earnings of $2.11 a share, drop from $2.30 a share in the 2019 period but that still handily beat Wall Street's estimate of $2.06 a share.

Revenue slipped to $2.09 billion from $2.13 billion, due largely to a decline in elective surgical procedures such as joint replacements during the pandemic. An analyst poll by Capital IQ projected revenue of $2.08 billion for the quarter.

"The fourth quarter saw continued pressure from COVID and its impact on the recovery of elective procedures, yet our core business remained strong as did our operational execution to close out 2020," said Bryan Hanson, president and chief executive officer of Zimmer Biomet, in a statement.

The company declined to issue a financial forecast, citing continued uncertainity over the ongoing pandemic.

Sharpest declines were seen in the Europe, Middle East and Africa, where sales dropped 13% to $408.3 million from the 2019 period. Americas sales remained largely flat, while sales in Asia and the Pacific region increased 7% to $393.1 million.

By product segment, sales of knee devices slid 3.1% to $737.1 million, while hip device sales slipped 1.3% to $504.1 million.

The company's dental, spine, and craniomaxillofacial unit saw sales climb nearly 3% to $314 million for the fourth quarter.

Zimmer announced earlier Friday that it intends to spin out its spine and dental products business into a new publicly traded company by mid-2022 so that it can focus on its other businesses.

"This transaction will position us to prioritize resources, simplify our operating models and deliver greater value through two independent publicly traded companies," said Hanson. "Our team remains confident and focused as we continue to deliver on our mission and serve patients, providers and our customers."

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