Benzinga | May 4, 2021 02:41PM EDT

Zimmer Biomet Stock Dips Despite Q1 Earnings Beat, Better-Than-Expected Guidance

* Zimmer Biomet Holdings Inc (NYSE: ZBH) shares took a hit today despite first-quarter results beating the consensus. Adjusted diluted EPS of $1.71, grew 0.6% Y/Y, and surpassed Wall Street's estimate of $1.53.

* It posted Q1 sales of 1,847.4, up 3.6% on a reported basis and 0.8% on a constant currency basis. Revenues came in above the consensus of $1.76 billion.

* Zimmer saw a rebound in hip procedures, while knee products continued to struggle. Hip sales grew by 3.3% compared to last year, while knees declined by 2.3%.

* The rebound also varied across geographies, led by overall sales growth of 22.4% in the Asia-Pacific region. The Americas remained relatively flat at 1.2%, while Europe, Middle East, and Africa fell by 3.5%.

* "Our performance was stronger than we anticipated in the first quarter, as we saw signs of the pandemic beginning to subside across many regions toward the end of the quarter driven by the acceleration of vaccine rollout. As we move into the second quarter, we expect that momentum to continue and believe we are well-positioned to meet the needs of our customers as elective procedures return," Zimmer Biomet President & CEO.

* The company's CFO, Suketu Upadhyay, said during Tuesday's call that revenue growth for the rest of the year is still dependent on the success of vaccination rollouts.

* First-quarter results were down about 8% compared to 2019, pre-pandemic, according to the CFO. However, Zimmer expects sales to be close to 2019 levels by the end of the second quarter.

* Guidance: Zimmer expects to log adjusted EPS of between $7.60 and $8 and set its sales outlook for 14% to 17% growth.

* It sees an adjusted operating margin of 26.5% - 27.5% for FY21.

* Price Action: ZBH shares were down 3.67% at $171.41 during the market session on the last check Tuesday.