Zimmer Biomet Holdings, Inc. more than doubled its third-quarter earnings on a 3% sales increase.
The Warsaw-based orthopedics company reported third-quarter earnings of $431.1 million, or $2.08 per share, up from $162.2 million, or 79 cents per share, for the same period last year.
Its third-quarter sales rose to $1.89 billion from $1.84 billion.
“Our global team delivered strong results this quarter, fueled by a clear focus on our strategic priorities and key new product introductions,” Bryan Hanson, Zimmer Biomet’s president and CEO, said in a third-quarter earnings report.
“I’m excited by the momentum across the organization and am grateful for the commitment and winning spirit from our team members around the world.”
Hanson told securities industry analysts during a conference call with them on the company’s third quarter that better-than-expected revenue growth resulted from improved performance across all of its geographies and businesses.
“In terms of supply, we have been able to meet customer demand and improve service levels, which further enhances the confidence of our sales teams around the world putting them back on the offense,” he said.
“We still have plenty of opportunity to decrease the complexity and increase the efficiency of our supply chain, but again to give team credit, I’m happy with the progress thus far.”
Some of the improved performance resulted indirectly from progress the company has been making with quality remediation efforts at its Warsaw North Campus, Hanson said.
“We continue to keep the FDA (Food and Drug Administration) updated on our progress and are highly confident in our path to full remediation. To instill further confidence in our progress, we have engaged independent third parties to conduct comprehensive mocked audits of our remediation work and the feedback has been positive,” he said.
“Additionally, we are seeing the benefits of our global rollout of the Quality Begins With Me program, which is focused on driving the solid and sustainable quality culture. This program supports an environment of empowerment and accountability for all of our manufacturing team members ensuring that every individual feels personal ownership of the quality process.”
Enough quality remediation has been accomplished to free up engineering time, which has allowed the company to refocus research and development resources on renovation, Hanson said.
“This gives us increased confidence in the robustness of our technology pipeline as we move into 2020 and beyond,” he said.
“Our innovation focus has also shifted, moving much more aggressively toward enabling technology around the implant, such as robotics, mini robotics, informatics and operating room efficiency,” he said.
“Although the implant will always be at the center of what we do, our goal is to provide a complete ecosystem that is both customer and patient-centric.”
On a constant-currency basis, Zimmer Biomet saw its Asia Pacific sales grow 8.8% on continued strength in emerging markets and across its knee and surgical, sports medicine, extremities and trauma (S.E.T.) segments, according to Suketu Upadhyay, the company’s chief financial officer.
Its Europe, Middle East and Africa sales rose 4.8%, led by S.E.T. and knee and hip franchise improvements, he said. Its Americas sales increased 2.3% on new product introductions, supply stability and commercial execution, which helped performance across most product categories.
The company’s guidance remained unchanged.