Zimmer Biomet Holdings Inc. on Tuesday reported second-quarter earnings of $142 million, or 67 cents per diluted common share, a $349 million improvement from last year's second-quarter loss of $207 million, or $1 a share.
The Warsaw-based orthopedic devices maker also reported net sales of $2.03 billion for the quarter ended June 30, a 65% increase from the $1.23 billion posted for the same three months of last year.
Second-quarter earnings for 2020 were significantly reduced because of the COVID-19 pandemic, which forced U.S. hospitals to delay non-emergency surgeries, including some knee and hip replacements.
Although Zimmer Biomet sells artificial joints and surgical instruments globally, the Americas are its largest market, contributing more than half of total sales for the second quarter. Knee joints generate the most revenue for the company, followed by hips.
For context, the company also compared its net sales from last quarter to the second quarter of 2019, which shows a 2% increase.
In the company's filing with the Securities and Exchange Commission, officials said they expect financial results to continue to be affected by the global pandemic.
"The consequences of COVID-19 continue to be extremely fluid, and there are many market dynamics that are difficult to predict. The COVID-19 pandemic may have a significant unfavorable effect on our financial position, results of operations and cash flows in the near term," the filing stated.
Ashlyn Evans, an analyst with investment firm Edward Jones, said she believes "a turnaround is coming" for Zimmer Biomet. She cited new products, including a surgical robot and a new knee system.
Evans said the manufacturer's primary risk is additional government penalties related to its Warsaw production plant, which is undergoing regulatory scrutiny.
The U.S. Food and Drug Administration has issued warning letters to Zimmer Biomet regarding production practices at its north campus facility.
Company officials have said their own representatives apparently provided incomplete information in some instances, leading inspectors to believe certain sterilization and other processes are inadequate when they actually are up to federal standards.