Zimmer Biomet, the Warsaw, Indiana-based medical device company, reported fourth-quarter results that outpaced analyst expectations as steady demand for its orthopedic implants supported growth.
For the quarter ended December 31, the company posted net sales of $2.24 billion, a 10.9% increase from the year-ago period. That top-line result exceeded the LSEG-consensus sales estimate of $2.23 billion. Zimmer Biomet's adjusted earnings per share for the quarter were $2.42, topping analysts' estimate of $2.40 per share.
The results were driven by robust performance in the company’s hips and knees franchises. Hips sales rose 7.9% on a year-over-year basis, while knees increased 6% in the fourth quarter, reflecting sustained procedural volumes in joint replacement surgeries.
Investors reacted modestly to the report in premarket trading, with Zimmer Biomet shares rising 1.5% ahead of the opening bell.
Management also issued forward-looking metrics for the coming year. Zimmer Biomet expects revenue growth in the range of 2.5% to 4.5% for the year and anticipates a 0.5% foreign currency headwind on its top line. For 2026, the company provided an adjusted profit per share outlook of $8.30 to $8.45. That guidance sits slightly below the average analyst projection of $8.48 per share.
Chief Executive Ivan Tornos noted in a statement that the company plans to transition to a predominantly direct and specialized sales model in the United States. Management expects that shift to weigh on 2026 sales growth in the near term, even as it believes the new structure will underpin expansion over a longer horizon.
Zimmer's executives, speaking at an industry conference in January, have previously said the U.S. market requires a more focused sales force and improved coverage of outpatient surgery centers. The company emphasized the importance of stronger presence in these centers as an increasing share of procedures migrates away from traditional hospital settings.
Market dynamics across medical device makers have been influenced by rising insurer medical-loss ratios, which the company and peers interpret as an indicator that patients are scheduling more procedures and utilization is increasing.
What this means
- Zimmer Biomet demonstrated durable demand in its core hips and knees businesses, helping it beat quarterly sales and adjusted EPS estimates.
- The planned shift to a more direct U.S. sales model introduces near-term execution risk to 2026 sales growth even as it aims to improve long-term coverage in outpatient settings.
- Guidance for 2026 profit is slightly below consensus, creating a potential source of investor caution despite the quarterly beat.