Zimmer Biomet Lowers Tariff Impact Forecast, Reports Modest Growth in Knee and Hip Segments

Zimmer Biomet, a leading medical technology company, has revised its forecast for the impact of tariffs on its operations in 2025, joining other medtech firms in adjusting their expectations. The company also reported modest growth in its key orthopedic segments, signaling a potential rebound in the industry.

Reduced Tariff Impact and Financial Outlook

Zimmer Biomet's Chief Financial Officer, Suketu Upadhyay, announced during an investor call that the company now anticipates a charge of approximately $40 million to its operating profit for 2025 due to tariffs. This represents a significant reduction from the previously estimated range of $60 million to $80 million.

The lowered forecast takes into account the company's mitigation efforts and lower-than-expected overall tariff rates. Upadhyay noted that the revised estimate assumes China tariffs will remain at current levels, though he emphasized that the situation remains fluid.

This adjustment in tariff impact contributed to Zimmer Biomet's decision to increase its guidance for adjusted earnings per share (EPS). The company now projects an adjusted EPS range of $8.10 to $8.30 for the year, up from the previous range of $7.90 to $8.10. Additionally, Zimmer Biomet narrowed its revenue guidance to a range of 6.7% to 7.7%, compared to the earlier projection of 5.7% to 8.2%.

Knee and Hip Segment Performance

Zimmer Biomet's knee segment showed signs of recovery in the second quarter of 2025, with year-over-year growth of just over 3%, generating $826 million in sales. This marks an improvement from the 0.6% growth observed in the first quarter. The segment experienced stronger growth internationally (4.8%) compared to the United States (1.7%).

CEO Ivan Tornos expressed encouragement about the acceleration of the knee business in the U.S. market, noting a 150 basis point growth quarter-over-quarter and a stronger growth rate in July. Tornos stated, "Things are going in the right direction — encouraged by, not satisfied," and emphasized the company's goal to consistently gain market share.

The hip segment also demonstrated a rebound, with year-over-year growth of 5.8% to $536.1 million in the second quarter. This represents a significant improvement from the 0.9% growth rate reported in the first quarter.

Strategic Initiatives and Future Outlook

Zimmer Biomet's leadership outlined several strategies to maintain growth momentum and improve market position. These include:

1. New product introductions and technological advancements
2. Investments in smart implants
3. Expansion into autonomous robotics through the proposed acquisition of Monogram Technologies

As the medical technology landscape continues to evolve, Zimmer Biomet's adjusted forecasts and strategic initiatives reflect the company's efforts to navigate challenges and capitalize on emerging opportunities in the orthopedic market.