Zimmer Biomet flags $60m-$80m tariff impact on 2025 profits

Yahoo

06-05-2025

Zimmer Biomet has adjusted its 2025 earnings forecast to $7.90-$8.10 per share, down from previous estimates falling between $8.15-$8.35, due to the Trump administration's tariffs.
The orthopaedic giant's stock fell by almost 12% after revealing on 5 May that tariffs would contribute to a $60m-$80m drag on its operating profit in 2025.
Zimmer elaborated on the revised projections in its Q1 2025 earnings call. During the quarter, the company achieved around $1.9bn in net sales, indicative of a 1.1% increase on a constant currency basis.
Zimmer's chief financial officer and finance, operations and supply chain EVP Suketu Upadhyay noted that while the tariff situation 'remains fluid', the company anticipates an impact of a '$60m to $80m' headwind to operating profit in 2025, with the 'majority' of the impact falling in the second half of the year.
Upadhyay said: 'This estimate contemplates our latest view of mitigation efforts currently underway and that the announced European reciprocal tariffs will go into effect after the 90-day stay period.'
Along with Zimmer's recent $1.2bn acquisition of Paragon 28 earlier this year, due to tariffs, the company anticipates its full-year operating margins to be down by 100 to 150 basis points versus 2024.
Upadhyay added: 'I will note that our 2025 impact should not be used as a run rate for 2026 due to a variety of factors, and that our estimate around the impact of tariffs in 2025 could change as the macro environment continues to unfold.'
While noting that the majority of its manufacturing is undertaken within the US, Zimmer also has manufacturing sites in the Chinese cities of Jintan and Zhejiang.
Trump's tariffs have heavily targeted China, with levies rising since the nation imposed 34% tariffs in response to those Trump announced would come into force on Chinese imports on 9 April. While the president has since stated that levies for goods imported from the country will 'come down substantially' yet 'won't be zero', they remain at 145% for now.
To mitigate some of the tariff impact, Upadhyay also shared that Zimmer is optimising 'in our view of country of origin', potentially alluding to a diminishment in its China-based manufacturing activities.
Other players in the medtech space are attempting to factor in the impact the Trump administration's current tariff measures may have on their bottom line in 2025.
Anticipating that its 2025 revenues may take a hit of around $500m, imaging giant GE HealthCare has downshifted its earnings per share profit to fall within the $3.90-$4.10 per share range, down from previous guidance between $4.61 and $4.75 per share.