While some businesses benefited from rising procedure volumes, they still grappled with shortages of supplies and tightening hospital budgets.
Orthopedics companies such as Johnson & Johnson benefited from rising procedure volumes in the second quarter, even as foreign-exchange rates, material costs and supply chain issues continued to weigh on their earnings.
Based on second-quarter results from Johnson & Johnson, Stryker, Smith & Nephew and Zimmer Biomet, the global market for joint reconstruction increased 6.9% in the quarter from the year-earlier period, analysts at RBC Capital Markets wrote in an Aug. 5 research note.
Still, it was an unequal recovery as Stryker and Zimmer gained share, while J&J and Smith & Nephew lagged, the analysts wrote. For Stryker and Zimmer, knee and hip procedures in the second quarter climbed from a year earlier, while J&J and Smith & Nephew reported a decrease in both.
“On the implant side, we’re feeling pretty good. Procedures are largely back to normal in most parts of the world. And really it’s about the hospital staffing,” Stryker CEO Kevin Lobo said in a July 26 earnings call. “If that staffing gets better, then obviously there’s a lot of pent-up demand for procedures and we’re feeling very good about our position in those businesses.”
Orthopedics companies reported steady demand for surgical robots, even as Intuitive Surgical warned that placements of its robots dropped as hospital budgets tightened. Both Stryker and Zimmer Biomet said they had strong customer pipelines, but more hospitals were turning to renting or financing large equipment rather than purchasing it outright. Both companies reported a decrease in revenue in the quarter for their segments that contained robotics.
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