Zimmer Biomet lowers 2025 profit forecast amid tariff uncertainty, shares fall

By Kamal Choudhury

(Reuters) - Zimmer Biomet Holdings on Monday lowered its 2025 adjusted profit forecast, and said it expects the proposed trade tariffs to weigh on the company's earnings this year.

The Warsaw, Indiana-based company's shares fell 10% to $92 in morning trading.

Zimmer, which makes devices used in hip and knee procedures, said it sees an impact of $60 million to $80 million on its operating profit, with a majority in the second half of the year. It sees a less than $5 million impact in the second quarter.

Investors and analysts are closely monitoring how medical device makers will handle any impact from the tariffs and whether they expect benefits from foreign currency fluctuations.

The medical device maker said it is addressing tariff concerns by examining options to mitigate the risks such as potential changes to the countries where it sources or manufactures its products.

The company considers China its main tariff risk and is looking to source from "Europe, as opposed to the United States" to reduce the risk, chief financial officer Suketu Upadhyay, said on a post-earnings call.

In an escalating trade war, U.S. President Donald Trump has imposed tariffs of up to 145% on Chinese goods, prompting Beijing to retaliate with a 125% tariff.

Zimmer had "put a good bit of inventory into China" before tariffs were enacted, Upadhyay added.

Earlier in the day, Zimmer said it expects 2025 adjusted profit per share in the range of $7.90 to $8.10, compared with its prior view of $8.15 to $8.35 per share. Analysts were expecting annual profit of $8.19 per share, according to data compiled by LSEG.

Last week, peer Stryker Corp reduced its 2025 profit outlook and said it anticipated a $200 million tariff impact in the year.

On an adjusted basis, the company posted first-quarter profit of $1.81 per share, topping estimates of $1.77 per share.

(Reporting by Kamal Choudhury in Bengaluru; Editing by Shailesh Kuber)

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