Zimmer Biomet Holdings, Inc. ZBH posted first-quarter 2026 adjusted earnings per share (EPS) of $2.09, which beat the Zacks Consensus Estimate by 12.6%. The adjusted figure rose 15.5% year over year.
The quarter’s adjustments included certain amortization, restructuring and other cost reduction initiatives, inventory and manufacturing-related charges and European Union Medical Device Regulation-related charges, among others.
GAAP EPS was $1.22 compared with 91 cents in the year-ago period.
ZBH's Revenues
Net sales of $2.09 billion increased 9.3% (up 6.8% on a constant currency basis) year over year. The figure also surpassed the Zacks Consensus Estimate by 1.8%.
Following the earnings announcement, ZBH stock plunged 1.8% in the premarket trading today.
ZBH's Revenues by Geography
Sales generated in the United States totaled $1.21 billion (up 8.6% year over year) for the quarter, while International sales grossed $877.4 million (up 10.3% year over year on a reported basis and 4.2% at CER).
Segmental Analysis of ZBH's Revenues
The company currently reports under four product categories — Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) and Technology & Data, Bone Cement and Surgical.
Sales in the Knees unit improved 1.8% year over year at CER to $828.6 million.
Hips’ sales grew 3.2% year over year at CER to $524.1 million.
Revenues in the S.E.T. unit rose 17.4% year over year at CER to $562.2 million.
Technology & Data, Bone Cement and Surgical revenues rose 11.7% to $171.8 million at CER in the first quarter.
ZBH's Margin Performance
Adjusted gross margin, after excluding the impact of intangible asset amortization, was 72.4%, reflecting an expansion of 119 basis points (bps) year over year. Gross margin expanded despite a 4.8% rise in the cost of products sold.
Selling, general and administrative expenses rose 12% to $849.9 million. Research and development expenses declined 6.5% to $103.4 million. Adjusted operating margin expanded 104 bps to 26.7%.
Zimmer Biomet Holdings, Inc. Price, Consensus and EPS Surprise
Zimmer Biomet Holdings, Inc. price-consensus-eps-surprise-chart | Zimmer Biomet Holdings, Inc. Quote
ZBH's Cash Position
Zimmer Biomet exited the first quarter of 2026 with cash and cash equivalents of $424.2 million compared with $591.9 million at the end of the fourth quarter of 2025.
Cumulative net cash provided by operating activities at the end of the first quarter was $359.4 million compared with $382.8 million in the year-ago period.
ZBH’s 2026 Outlook
Zimmer Biomet has updated its EPS guidance for 2026.
Revenue growth is expected to be in the band of 2.5-4.5%. The Zacks Consensus Estimate for revenues is pegged at $8.52 billion, implying 3.6% year-over-year growth.
Adjusted EPS guidance for the full year is now expected to be in the range of $8.40-$8.55 (previously $8.30-$8.45). The Zacks Consensus Estimate for 2026 adjusted EPS is pegged at $8.37.
Our Take on ZBH
Zimmer Biomet exited the first quarter with better-than-expected results, wherein both earnings and revenues beat estimates. All the business segments reported growth in the quarter.
Notable developments that fueled growth include the launch of the Phantom Curved TTC Nail System, a next-generation solution to support hindfoot fusion procedures and completed first case using the G7 TM Acetabular System, a next-generation implant engineered to address challenging primary and revision hip replacement surgeries, following FDA 510(k) clearance in February 2026.
Additionally, the expansion of both margins looks encouraging.
ZBH's Zacks Rank and Key Picks
Zimmer Biomet currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Globus Medical GMED, Intuitive Surgical ISRG and Phibro Animal Health PAHC.
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared with the industry’s negative yield of 1.4%. The company’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared with the industry’s negative yield of 0.9%. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted a second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.
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This article originally published on Zacks Investment Research (zacks.com).