The company's first-quarter net sales rose 3.8 percent to $1.98 billion (4.5 percent on a constant currency basis). Excluding approximately 220 basis points of contribution from the LDR Holding Corporation acquisition, revenue increased by 2.3 percent compared with the first quarter of 2016. Diluted earnings per share for the quarter were $1.47 reported, an increase of 172.2 percent compared with the prior year period. Adjusted diluted earnings per share for the quarter were $2.13, an increase of 6 percent compared with Q1 2016.
"Zimmer Biomet delivered first quarter revenue and adjusted earnings growth consistent with our expectations, as we positioned the company for sales acceleration in the second half of the year," said David Dvorak, president and CEO of Zimmer Biomet. "During the quarter, we made progress towards improving our global supply chain throughput, in concert with ongoing, focused investments to harmonize and optimize our global manufacturing and quality systems. We will continue driving these priorities as we progress through the balance of 2017, while leveraging our specialized sales channels and advancing the commercialization of differentiated clinical offerings."
Net earnings for the first quarter (ended March 31) were $299.4 million, an increase of 175.2 percent compared with the prior year period, and $433.4 million on an adjusted basis, an increase of 6.4 percent. Operating cash flow for the first quarter was $275.4 million.
In the first three months of 2017 the company paid $48.1 million in dividends and declared a first quarter dividend of 24 cents per share.
Revenue in North and South America rose 4.9 percent to $1.23 billion, offsetting a 0.7 percent slide in Europe, Middle East and Africa (EMEA) proceeds ($453 million). Asia Pacific sales increased 6.9 percent to $289 million.
Knee proceeds slipped in almost all geographic areas, falling 3.4 percent in EMEA and 0.1 percent in the Americas. Asia Pacific knee sales, however, rose 5 percent to $105 million. Hip sales, on the other hand, held their own, climbing 0.2 percent in the Americas and 9.5 percent in Asia Pacific. Hip revenue fell 0.5 percent in EMEA.
Dental sales fell 0.7 percent to $108 million, while sports medicine, extremities and trauma revenue increased 6 percent to $425 million. Spine and craniomaxillofacial sales, however, jumped 32 percent to $186 million.
Zimmer Biomet updated its full-year 2017 constant currency revenue and adjusted earnings per share guidance. The company now estimates full-year, constant currency revenue to increase between 3.2 percent and 4.2 percent compared to the prior year, inclusive of approximately 120 basis points of contribution from the LDR transaction. Previously, Zimmer Biomet expected full-year, constant currency revenue to increase between 3.7 percent and 4.7 percent, inclusive of the LDR contribution. The company now expects foreign currency translation to decrease revenue for the full year by approximately 1.2 percent. Previously, Zimmer Biomet had estimated foreign currency translation to decrease revenue by 1.5 percent. Therefore, the company now expects full-year 2017 revenue to increase between 2 percent and 3 percent when compared to full-year 2016, or to be in a range of $7.835 billion to $7.915 billion. Previously, the company had estimated revenue growth to be in a range of 2.2 percent to 3.2 percent when compared to full-year 2016, or to be in a range of $7.855 billion to $7.930 billion. Revenue growth, excluding the contribution from LDR on a constant currency basis, is also expected to be in a range of 2 percent to 3 percent for the full-year 2017. Previously, the company had estimated full-year revenue growth to be in a range of 2.5 percent to 3.5 percent on a similar basis.
Additionally, Zimmer Biomet now expects its full-year 2017 diluted earnings per share to be in a range of $4.68 to $4.88, and in a range of $8.50 to $8.60 on an adjusted basis. Previously, the company had expected diluted earnings per share to be in a range of $4.37 to $4.67 on a reported basis, and in a range of $8.50 to $8.68 on an adjusted basis.