(Reuters) - Zimmer Biomet Holdings (NYSE:ZBH) Inc raised its annual sales and profit forecasts on Tuesday, banking on strong demand for its knees and hips products amid a sustained recovery in surgical procedures in the United States.
Shares of the Indiana-based medical device maker rose 3.72% to $144 before the bell, also buoyed by better-than-expected first-quarter results.
Zimmer Biomet's upbeat outlook comes after several medical device makers, including Stryker Corp (NYSE:SYK) and larger rival Abbott Laboratories (NYSE:ABT), raised their forecasts as easing staffing shortages at hospitals aid a recovery in medical procedures.
Zimmer Biomet, which offers products such as knee replacements and surgical robots, now expects a profit of $7.40 to $7.50 per share for 2023, compared with $6.95 and $7.15 per share previously forecast. Analysts on average were expecting a profit of $7.06 per share, according to Refinitiv data.
The company expects revenue to grow 5%-6% this year, compared with its previous forecast of 1.5%-3.5%.
"Investor focus is largely on Zimmer's ability to take a share in the knee and head market and the adoption of the company's new launches," BTIG analyst Ryan Zimmerman told Reuters before the results.
Analysts have highlighted that Zimmer's smart implant that was authorized by the U.S. health regulator in November for cementless knee replacement procedures will have a broad market opportunity.
The medical device maker's revenue rose 10% to $1.83 billion in the first quarter, beating analysts' average estimates of $1.70 billion.
Excluding items, the company made a profit of $1.89 per share for the quarter ended March 31, compared with analysts' estimates of $1.64 per share.