Shares of ZimVie (ZIMV -13.52%) are sinking today, down by 12.7% as of 12:40 p.m. ET. The decline came after the life sciences company announced its second-quarter results following the market close on Wednesday.
ZimVie reported Q2 revenue of $233.4 million, down 11.5% year over year. It posted a net loss of $8.7 million, or $0.33 per diluted share, based on generally accepted accounting principles (GAAP). The company's non-GAAP (adjusted) earnings were $17.6 million, or $0.67 per diluted share. This result handily beat the consensus earnings estimate of $0.51 per share.
Investors, though, appeared to focus mainly on ZimVie's full-year guidance. The company cut its 2022 sales outlook to a range of $915 million to $930 million compared to its previous forecast of $1 billion. It also lowered the adjusted EPS guidance. ZimVie now expects adjusted EPS will be between $1.80 and $2.00. The previous projection was for adjusted EPS in the range of $2.10 to $2.30.
At least part of ZimVie's guidance cut stemmed from foreign exchange headwinds. While a strong dollar is hurting the company now, this could be only a temporary issue.
But foreign exchange isn't ZimVie's only problem. The company expects its dental business will deliver only mid-single-digit growth in 2022 on a constant currency basis. That's at the lower end of prior guidance. It also projects spine business sales to decline by a double-digit percentage on a constant currency basis.
There are multiple factors behind the dismal outlook for ZimVie's spine segment. The company exited several unprofitable markets late last year. It also discontinued some products and faces significant competition for other spine products.
ZimVie could be in a better position going forward. The company recently launched a couple of promising new dental products. It also received a positive coverage decision from Anthem for The Tether, a device used to treat pediatric scoliosis.