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How Zimmer Biomet Fared in the Second Quarter

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Updated

Revenue trends

In the second quarter, Zimmer Biomet (ZBH) generated revenues of $2.0 billion compared to $1.9 billion in the second quarter of 2017, a ~3% YoY increase. In the first half of 2018, Zimmer Biomet reported net revenues of $4.0 billion compared to $3.9 billion in the first half of 2017.

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Earnings trends

In the second quarter of 2018, Zimmer Biomet Holding reported net earnings of $185.0 million compared to $184.2 million in the second quarter of 2017.

In Q2 2018, Zimmer Biomet reported diluted EPS (earnings per share) of $0.90. Zimmer Biomet’s diluted EPS in the second quarter of 2018 remained flat compared to the second quarter of 2017. In the first half of 2018, Zimmer Biomet reported net earnings of $359.7 million compared to $483.6 million in the first half of 2017. In the first half of 2018, Zimmer Biomet generated diluted EPS of $1.76 compared to $2.38 in the first half of 2017.

Expense trends

In the second quarter of 2018, Zimmer Biomet reported cost of products sold (excluding intangible asset amortization) and intangible asset amortization expenses of $583.7 million and $149.5 million, respectively, compared to $527.7 million and $147.7 million in Q2 2017.

In Q2 2018, Zimmer Biomet reported R&D (research and development) and SG&A (selling, general, and administrative) expenses of $99.1 million and $791.3 million, respectively, compared to $92.6 million and $752.2 million in Q2 2017. In the second quarter of 2018, Zimmer Biomet reported net operating expenses of $1.71 billion compared to $1.67 billion in the second quarter of 2017.

In the first half of 2018, Zimmer Biomet reported cost of products sold, R&D, and SG&A expenses of $1.2 billion, $194.8 million, and $1.6 billion, respectively, compared to $1.0 billion, $183.7 billion, and $1.5 billion in the first half of 2017.

Updated guidance for 2018

Zimmer Biomet anticipates revenue growth for fiscal 2018 to be in the range of 1.0% to 2.5% compared to the fiscal year 2017. Also, Zimmer Biomet estimated free cash flow for fiscal 2018 to be in the range of $1.2 billion to $1.35 billion.

Baxter International (BAX) and Align Technology (ALGN), Zimmer Biomet’s peers in the medical devices market, reported revenues of $2.8 billion and $490.3 million, respectively, in the second quarter of 2018.

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