(Reuters) - Zimmer Biomet Holdings (NYSE:ZBH) Inc forecast 2024 profit above Wall Street expectations on Thursday, betting on resilient demand for its medical devices, and said it had initiated a restructuring program late last year to cut costs.
The company expects run-rate savings of about $200 million by 2025 through the initiative.
The Indiana-based medtech firm also beat fourth-quarter revenue and earnings estimates, driven by strong sales at its units selling sports medicine, robotic and surgical products.
"We don't think investors are willing to give the company credit just yet, and think this still remains a show me story for Zimmer," J.P.Morgan analyst Robbie Marcus wrote in a note.
Shares of the company fell nearly 4% to $123 in premarket trading.
Much like Abbott Laboratories (NYSE:ABT) and Boston Scientific (NYSE:BSX), Zimmer is benefiting from people, especially older adults, returning for elective surgeries, such as joint replacements, deferred during the pandemic.
Analysts also remain bullish on medical device makers due to pent-up demand for non-urgent procedures, improving hospital staffing and capacity, better pricing and growing interest in robotics.
Zimmer expects full-year 2024 profit in the range of $8.00-$8.15 per share, above analysts' estimate of $7.95.
The company projected full-year revenue to grow in the range of 5% to 6% on a constant currency basis.
Combined sales at Zimmer's hips and knees units came in at $1.30 billion in the fourth quarter, compared to analysts' estimate of $1.31 billion, according to LSEG data.
Apart from hip and knee equipment, Zimmer also makes sports medicine and trauma care products through its S.E.T. unit, which brought in sales of $453.3 million in the fourth quarter, above estimates of $447.6 million.
Zimmer's fourth-quarter revenue rose 6.3% to $1.94 billion, above estimates of $1.93 billion.
On an adjusted basis, profit of $2.2 per share beat estimates of $2.15.