Smith+Nephew, Stryker and Zimmer Biomet have rounded out the current earnings season with third-quarter results, revealing how the orthopaedics industry remains constrained by COVID-19, hospital staffing shortages and lower pricing in China.
Analysts expected orthopaedic companies to fall short of prior revenue forecasts, having heard intra-quarter commentary about the impact of the U.S. delta wave and other forces. Even so, the results managed to throw up some surprises, such as Stryker’s orthopaedic and spine sales falling short of Evercore ISI expectations but being offset by MedSurg growth, and provide an outlook for the fourth quarter that disappointed some observers.
None are forecasting a strong rebound in the fourth quarter. Having reported a 5.9% underlying drop in third-quarter orthopaedic sales, Smith+Nephew forecast a deceleration of its overall business in the fourth quarter, reflecting fewer selling days than in the comparable period of last year. Smith+Nephew expects to hit the bottom end of its 10% to 13% full-year sales growth guidance, pointing to a sharp slowdown after nine months in which the business grew 14%.
Zimmer and Stryker also downplayed the prospects of a rapid recovery in the fourth quarter. Stryker expects fourth quarter growth of its more deferrable businesses to be similar to the delta-hit third quarter. Zimmer cut the midpoint of its full-year sales guidance by 23%, reflecting the impact of a weak third quarter and the assumption that the headwinds will persist.
“Until we see a fundamental shift in these trends, we’re just going to assume that these pressure points aren’t going away, but will be with us into Q4 and possibly into early 2022,” Zimmer CEO Bryan Hanson told investors on the third-quarter results conference call.
Image Credit: Nick Paul Taylor / MedTech Dive