CONMED Cuts Guidance After 60% Surgical Volume Drop

CONMED Corporation (CNMD) slashed its full-year revenue and earnings guidance Tuesday after what executives described as an abrupt slowdown in elective surgeries during the second quarter. The medical-device maker now expects 2026 revenue of $1.35 billion to $1.37 billion, down from a prior range of $1.41 billion to $1.44 billion. Adjusted earnings per share were cut to $4.55 to $4.70 from $5.10 to $5.30.

The company reported Q2 adjusted EPS of $1.18 on revenue of $341.4 million, missing the $1.31 consensus on $364.8 million in sales. The miss was driven by a roughly 60% drop in surgical volumes in late April and May, which CEO Patrick Beyer attributed to a “sudden and broad-based” pullback in hospital procedure scheduling. The slowdown was most acute in CONMED's general surgery and orthopedics segments, which together account for the bulk of its disposable instrument revenue.

“We saw a near cessation of elective cases for about five weeks,” Beyer said on the call. “It was not a single region or a single product line. It was across the board.” He added that volumes began recovering in June but had not returned to pre-drop levels by quarter-end.

The company's capital equipment sales, which tend to be lumpy, also disappointed. Hospitals paused purchasing decisions during the volume disruption, pushing several large orders into the second half. CFO John Gallagher said the company expects those orders to close in Q3 and Q4, but acknowledged the timing is uncertain.

CONMED's gross margin contracted 120 basis points year over year to 55.2%, partly due to under-absorbed overhead from the production slowdown. The company cut internal production schedules in May, then had to ramp back up in June as volumes partially returned, creating inefficiency.

On the balance sheet, CONMED ended the quarter with $425 million in debt and $58 million in cash. Gallagher said the company remains within its lending covenants but flagged that leverage ticked up to 3.2x adjusted EBITDA from 2.9x in Q1. He declined to comment on whether the company would consider asset sales or a dividend cut to preserve liquidity, but said “all options are on the table if the volume recovery stalls.”

The guidance cut follows a string of medical-device companies reporting procedure volume softness in the second quarter, though most have blamed seasonal patterns or staffing shortages. CONMED's drop was far sharper than peers, which Beyer said may reflect the company's heavier exposure to ambulatory surgery centers that were quicker to cancel cases.

“We are not calling a recession in health care utilization,” Beyer said. “But we are planning for a slower recovery than we hoped.”

Shares of CONMED fell 12% in after-hours trading following the release, according to AlphaScala data. The stock carries an Alpha Score of 66 out of 100, a Moderate rating, and is down 3.53% on the day. The company's next scheduled update is its Q3 earnings call in late October.

JPMorgan Chase & Co. analyst Robert Marcus, who was on the call, questioned whether the volume drop was a “canary in the coal mine” for broader health care spending. Beyer said CONMED has not seen similar signals from its hospital customers' capital budgets, but noted that “if this is the new normal, we have to adjust faster.”