Zimmer Biomet Raises 2026 Organic Sales Growth Outlook to 3.0%–3.5%
Key Facts
Zimmer Biomet reported on November 4 results for the third quarter ended September 30, with net sales of $2.063 billion, up 3.1% on a reported basis and 3.7% at constant currency from the year-earlier period. Adjusted diluted earnings per share were $1.90, unchanged from the third quarter of the prior year, while earnings per share under generally accepted accounting principles fell to $1.00, down 13.8%. Adjusted earnings exceeded analysts’ estimate of $1.88, while sales topped the revenue estimate of $2.04 billion, according to Investing.com coverage attributed to Reuters. The results pair sales growth with unchanged adjusted EPS year over year, alongside a decline in earnings under the official accounting measure. CEO Ivan Tornos said broad-based performance strengthened the company’s confidence in raising its full-year constant-currency organic sales growth and adjusted EPS outlook.
The company raised its 2026 constant-currency organic sales growth outlook to 3.0%–3.5%, from the previous range of 2.25%–3.25%. It also raised its reported sales growth outlook to 4.4%–4.9% from 3.9%–4.9%, and its constant-currency growth range to 4.1%–4.6% from 3.4%–4.4%. Zimmer Biomet also adjusted its full-year adjusted diluted EPS range to $8.50–$8.60, compared with the previous range of $8.47–$8.59. The higher ranges reflect the company’s review of its annual outlook following the quarterly results, with the figures remaining within guidance rather than representing a final result for the year. For cash flow, the company said it expects free cash flow to grow 9%–11% during 2026.
Sales performance varied across the company’s units during the quarter, with hip sales growing 7.0% at constant currency and S.E.T. sales rising 7.1%. The technology, data, bone cement and surgical category posted growth of 13.0% at constant currency, while knee sales fell 2.6%. Tornos said hip, S.E.T. and technology, data, bone cement and surgical account for two-thirds of the company’s business and grew at high-single-digit or double-digit rates. He added that the performance underscores progress in the company’s diversification strategy. The figures show strength in the cited categories alongside continued weakness in knee sales year over year.
Adjusted operating margin was 25.1% in the third quarter, compared with 26.5% in the same period a year earlier. Adjusted operating profit was $518.8 million, versus $531.0 million a year earlier. Those figures are consistent with the decline in GAAP EPS to $1.00, despite adjusted EPS remaining at $1.90. The company generated operating cash flow of $560.0 million and free cash flow of $372.4 million during the quarter. The period’s results therefore combine cash generation in the hundreds of millions of dollars with year-over-year pressure on operating margins and adjusted operating profit.
The results follow the company’s second-quarter 2026 report of net sales of $2.177 billion, up 4.8% on a reported basis and 4.0% organically at constant currency, with adjusted EPS of $2.07. On a quarterly basis, third-quarter sales were below second-quarter levels, and adjusted EPS also declined from that quarter. Year over year, third-quarter net sales rose, while adjusted EPS was unchanged. Zimmer Biomet had set November 4 as the date for making its results statement available at 6:30 a.m. Eastern time and for its online investor conference at 8:30 a.m. that day. The full-year free cash flow growth outlook remains at 9%–11%, as announced by the company during the results conference.