Zimmer Biomet reported profit rose 64% as sales of its hip and knee products improved over the third quarter in its financial results released Friday morning.
The Warsaw, Indiana-based medical device company saw a profit of $162.2 million compared with $98.8 million a year earlier. Its sales rose 1.3% to $1.84 billion, slightly exceeding analysts' expectations.
Knee sales saw a shallow recovery of almost 1%, up to $628 million. Zimmer’s hips division consistently shines, and this quarter was no exception as the company reported a sales increase of 2.8% up to $445 million in the sector.
More than a million Americans have joint replacement surgery every year and more than one in three knee joint replacements comes from Zimmer, according to the company.
Although knee and hip sales were the clear drivers of profit growth, Zimmer saw small but marked increases across every portfolio including surgical, sports medicine, foot and ankle, extremities and trauma (up 2.4% to $415 million), dental (up 0.6% to $92 million), and spine and craniomaxillofacial (up 0.2% to $185 million).
"Although our sales results clearly benefited from less challenging sales comparisons, as well as the timing of certain tenders and capital sales, our organic growth continued to signal that we are turning the business around consistent with our expectations," Bryan Hanson, president and CEO of Zimmer, said in the earnings release.
Earlier this month, Zimmer partnered with Apple to study the efficacy of using the Apple Watch as patient support before and after knee and hip replacement surgery. The two companies launched a clinical trial to test the impact of an app, called mymobility, that’s meant to connect patients with their surgical care teams.
The collaboration could be lucrative for both companies, as services that ameliorate recovery from joint replacement are in high demand. The number of Americans expected to undergo knee and hip replacements is expected to reach 3.5 million by 2035.
Not all is rosy with Zimmer, though. The medical device maker is trying to shrug off an FDA warning from August about quality violations at a Warsaw, Indiana plant.
Diluted earnings per share were $0.79, an increase of 65% over the prior year period, and adjusted diluted earnings per share were $1.63, a decrease of 5%.
Guidance for 2018 remained effectively the same. Moving forward, Zimmer will continue to focus on projects for "expanding our comprehensive portfolio, advancing standards of care and creating new opportunities for our salesforce to deliver growth" according to Hanson.