Zimmer Biomet expects $60M to $80M tariff impact this year
By the numbers
Q1 revenue: $1.91 billion
1.1% increase year over year
Net income: $182.6 million
5.6% increase year over year
Zimmer Biomet expects a $60 million to $80 million impact to its operating profit from tariffs this year, CFO Suketu Upadhyay told investors Monday.
That estimate accounts for 'current administration proposals,' Upadhyay said, including announced European reciprocal tariffs going into effect after a 90-day stay. Most of the impact is expected in the second half of the year.
Zimmer's stock fell by more than 11% on Monday, as analysts called out uncertainty about tariffs and lost market share in the company's knees segment.
J.P. Morgan analyst Robbie Marcus wrote in a research note that the tariff impact looks 'manageable at face value, but we have more questions than answers on the size of the full-year impact in 2026.'
BTIG analyst Ryan Zimmerman added that the 2026 impact remains an 'open-ended question,' and the orthopedics company's inventory levels suggest that tariffs will show up more meaningfully next year.
Zimmer lowered its adjusted earnings per share forecast by 25 cents to a range of $7.90 to $8.10 for 2025. The forecast factors in the tariffs and the $1.1 billion purchase of Paragon 28, a company specializing in foot and ankle implants, which closed in April.
At the same time, the company raised its revenue growth forecast for the year to a range of 5.7% to 8.2%, accounting for foreign currency rates and the Paragon acquisition.
Zimmer forecast a smaller hit from tariffs than other medtech peers, which have set out estimates in the hundreds of millions of dollars. For example, competitor Stryker called out a $200 million impact from tariffs, and lowered its earning per share forecast.
When asked about this, Upadhyay said the majority of Zimmer's devices are produced in the U.S. Still, the company is taking some early steps to mitigate the impact, including optimizing country of origin, using dual sourcing or redundant sourcing when possible, and spending less in areas that don't affect the company's long-term growth, the CFO added.
Lost share in knees
Zimmer reported $792.9 million in sales from its knees business in the first quarter, a 0.6% increase year over year. Meanwhile, competitor Stryker, which reported sales of $639 million in knees, grew at a faster rate of 8.7%.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wall Street Journal
25 minutes ago
- Wall Street Journal
Europe's TTF Gas Price Drops Ahead of Alaska Summit
1358 GMT – European natural-gas prices drop to their lowest in more than a year ahead of a closely watched summit between President Trump and Russian President Vladimir Putin in Alaska. The benchmark Dutch TTF contract trades 3.1% lower to 31.13 euros a megawatt hour and is on track for a 4% weekly loss. If successful, the meeting could pave the way for further talks between Trump, Putin and Ukrainian President Volodymyr Zelensky. Traders see little chance of Russian pipeline gas returning to Europe quickly, even if a Ukraine peace deal is struck. However, any progress toward ending the conflict is expected to put further pressure on energy prices and ease fears that U.S. sanctions could disrupt Russian flows. ( 0923 ET – U.S. natural gas futures are recovering ground on short profit-taking, while remaining on track for a moderate weekly loss. Shorts were encouraged to take profits after the front month held at support around $2.77 following yesterday's above-average storage build, Eli Rubin of EBW Analytics says in a note. 'A continued test higher is possible near-term, and a larger gain from short profit-taking cannot be ruled out.' Nymex gas is up 3% at $2.927/mmBtu. (
CNBC
2 hours ago
- CNBC
U.S. shoppers fuel jewelry splurge despite tariff headwinds
U.S. shoppers are continuing to splurge on jewelry, even as economic headwinds weigh on consumer sentiment in Europe and China. Danish jewelry brand Pandora said the U.S. market, which accounts for one-third of its overall revenues, remained an outlier amid weaker global sales. "The U.S. continues to buck the trend," Pandora CEO Alexander Lacik told CNBC's "Squawk Box Europe" on Friday. "A strong U.S. consumer continues to be interested in Pandora, and, as I said, Europe is a bit of a mixed bag," he went on, noting the European client base had been "under pressure for quite a while." China, which accounts for just 1% of Pandora's total revenues, "continues to be challenging," Lacik said, citing broader consumption difficulties in the country. His company, known for its high-street stores selling popular charm bracelets and silver jewelry, on Friday posted an 8% rise in U.S. sales on an annual like-for-like basis in the second quarter. Sales in China, on the other hand, fell 15% over the period, while those across several major European markets also declined by high single-digits. Similar trends were observed at ultra-luxe jewelry group Richemont, owner of the Cartier brand, which last month posted a 17% jump in America sales in the three months to June 30, despite softer comparative sales in Asia Pacific. Overall, U.S. jewelry sales were strong in the first half of the year, rising 5% versus a flat reading in the first half of 2024, according to analytics firm Tenoris. In July — typically a slower month for jewelry retail — sales in the country were up 3.5%, it noted. "The Pandora brand is working in the U.S. at the moment, which has helped to drive its success," William Woods, senior analyst and head of European retail and food delivery at Bernstein, told CNBC by email. He added that weakness for Pandora in France and Germany, meanwhile, was "consistent with a volatile environment that we have seen over the last few yeas." Woods cited overall strength in the U.S. market at present, but nevertheless pointed to a varied picture from retailers, some of whom have cut their full-year outlooks on tariff concerns. Tariffs remain a key challenge for jewelry brands, including for Pandora, which depends heavily on manufacturing in Thailand. The company on Friday updated its tariff guidance to forecast a 200 million Danish kroner ($31 million) hit in 2025, followed by an estimated 450 million Danish kroner blow next year. It forecasts an operating profit margin of around 24% this year. The outlook accounts for tariff rates as they currently stand, with Morgan Stanley in a Friday note flagging an uptick in Thailand's current 19% rate as a key risk for the company. Pandora shares fell over 14% Friday morning following the release of the second-quarter results. CEO Lacik said his company was currently absorbing two-thirds of those added incurrences, including by way of cost optimization and pricing adjustments, while the remainder is to be born out in this year's estimated operating profit margin. However, he cited tariffs as a fresh headwind that could undermine the current strength of the U.S. consumer — and jewelry demand — alongside higher input costs. Silver, key to Pandora's production, hit 14-year highs last month, while prices for traditionally safe-haven asset gold have continued to climb this year. "[The U.S. consumer] may change in the future, who knows, with the impact of tariffs, not just in jewelry but in general," Lacik said. "We have a weakening dollar, we have an increase in silver prices, and then the cream on top is the tariffs in the U.S.," he added.
American Military News
4 hours ago
- American Military News
5 Things To Know Ahead Of The Trump-Putin Summit
This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission. As US and Russian Presidents Donald Trump and Vladimir Putin meet face-to-face for the first time in six years, here's what you need to know. What Does Putin Want? Many analysts see a meeting with Trump as a victory in and of itself for Putin, as the leader seeks an end to his international isolation. In other words, it's all about the photo op. 'No major Western leader has met with [Putin] since Russia's full-scale invasion of Ukraine. Now he gets a summit with the US president, without any concessions on his part,' said Jana Kobzova, who was foreign policy adviser to former Slovak President Zuzana Caputova. Beyond that, Putin's goals remain largely unchanged since the beginning of the war. 'The Kremlin feels that it has the upper hand on the battlefield right now, so if it can't extract concessions diplomatically, it can just continue to plough forward on the battlefield,' said Kobzova. For this reason, Putin is expected to resist being pushed into accepting a cease-fire. What Does Trump Want? Trump has said that he wants to use the summit to 'set the table' for a follow-up meeting that would involve Ukrainian President Volodymyr Zelenskyy. 'I think it's going to be a good meeting, but the more important meeting will be the second meeting that we're having. We're going to have a meeting with President Putin, President Zelenskyy, myself, and maybe we'll bring some of the European leaders, maybe not,' Trump said on August 14. Trump has also made it clear that he wants to achieve a cease-fire as soon as possible, as a first step toward a lasting settlement. But some analysts say Putin will try to muddy the waters by offering other prizes. Jim O'Brien, who served as US Assistant Secretary of State for European and Eurasian affairs in the Biden administration, says Putin is likely to suggest financial incentives to Trump as a way to avoid agreeing to concrete details for a cease-fire. 'Bilateral arrangements may emerge, especially about commercial deals benefiting a few American businesses,' he said. What About Zelenskyy? Zelenskyy wants a seat at the table. Ukraine's president is notably excluded from the talks and has warned that decisions made in his absence will be meaningless. The topic of territorial concessions is something Zelenskyy has repeatedly pushed back against. Trump said ahead of the summit that he will not force Kyiv to surrender territory, but his suggestion that Putin and Zelenskyy could 'divvy things up' is causing alarm in Kyiv. Such demands are not just hard to swallow for Zelenskyy, but could be incredibly difficult for him to sell to the Ukrainian public. He will hope Trump and Putin do not agree to something he cannot agree to, making it appear to the White House that he is the obstacle to peace. Where Do Things Stand On The Battlefield? Russia occupies about one-fifth, or 114,500 square kilometers, of Ukraine's land. The front line stretches some 1,000 kilometers through the regions of Kharkiv, Luhansk, Donetsk, Zaporizhzhya, and Kherson. Both sides continue to suffer heavy losses, but earlier this month Russia began to make key gains on the battlefield in eastern Ukraine, advancing about 10 kilometers as it concentrated forces around Toretsk and Pokrovsk. It embodies a Russian strategy that military analysts say has involved trading heavy casualties on the battlefield in exchange for small but sustained gains. What Happens Next? Trump has suggested a second, trilateral meeting could happen quickly — and possibly also take place in Alaska. US Secretary of State Marco Rubio spoke on August 14 about the conditions that would need to be met to achieve a lasting peace. 'I think we all recognize that there'll have to be some conversation about security guarantees. There will have to be some conversation about, you know, territorial disputes and claims and what they're fighting over,' Rubio said. Russia will continue to insist that what it calls the 'root causes' of the conflict need to be addressed, which is Kremlin code for putting an end to Ukraine's hopes of NATO membership and steps to effectively disarm the Ukrainian military. Each side's aims collide with the other's red lines. Peace won't come quickly or easily.
