Smith & Nephew gains as emerging markets boost Q1 results

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Smith & NephewSmith & Nephew (NYSE:SNN) shares are up today in London and New York after the British medical device giant said emerging markets drove strong 1st-quarter results.

Overall sales grew 0.4% to $1.14 billion and 3% on a constant-currency basis for the 3 months ended April 1, the company said. Smith & Nephew no longer reports quarterly profits or earnings. Although sales fell in both the U.S. and established markets overseas, emerging market revenues jumped 13.1% to $173 million compared with Q1 2016.

“I am pleased with the start of 2017, which was in-line with our expectations. In particular, performance in the emerging markets was good, returning to double-digit growth, with China up 14% underlying. Our innovative new products, such as the Lens camera and Werewolf Coblation systems, have been well received, and we look forward to the imminent full market release of the total knee application on our Navio robotics-assisted surgery system,” CEO Olivier Bohuon said in prepared remarks. “Over the last few years we have successfully put in place the right structures and capabilities to make the group stronger, simpler, more agile and efficient. We continue to focus on execution and expect to see progress through the year.”

Smith & Nephew said it still expects to add 20 to 70 basis points to its trading profit this year, on constant-currency sales growth of 3% to 4%.

During a conference call with analysts, Bohuon said he’s focused on organic growth in the short term, rather than acquisitions. Analyst chatter earlier this year had Smith & Nephew as the most likely acquirer of extremity orthopedics maker Wright Medical (NSDQ:WMGI).

Although M&A is “always on the agenda” and acknowledging that extremities are an area of interest for Smith & Nephew, “for the moment, this quarter, I am interested in developing my commercial excellence,” Bohuon said.

“[M&A] is still high on the agenda, but it’s not a top priority for the time being,” he said.

SN shares were up 2.5% to £13.02 apiece today as of about 11:30 a.m. in London; SNN shares rose 3.0% to $33.11 each in pre-market trading in New York.

Material from Reuters was used in this report.

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