Patch-up your portfolio with Smith & Nephew

Following a profits warning in September, investors weren’t expecting much from Smith & Nephew’s third-quarter results. And they were right not to – there wasn’t much news.

Following a profits warning in September, investors weren't expecting much from Smith & Nephew's (SN/, 479p) third-quarter results. And they were right not to there wasn't much news. The medical devices group announced that it would drop Dermagraft an artificial skin product designed to treat leg ulcers after US regulators refused to approve it, resulting in a £35m one-off charge. And overall performance has broadly met analysts' expectations. Sales and operating earnings both increased by 11% year-on-year to £341m and £65m respectively, and the group expects revenues to rise by 14%-16% in 2006.

Still, the lack of big news doesn't mean the shares aren't interesting. They have been under pressure over the past few months amid fears that price growth for orthopaedic implants the firm's biggest business by far could soon be capped under pressure from hospital chains and governments, says Robert Cyran on Breakingviews.com.

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Annunziata Rees-Mogg

Annunziata was a deputy editor at MoneyWeek, covering financial markets, politics, economics and comment pieces. She then went on to the Daily Telegraph as a lead writer where she wrote a column on young women’s financial issues. She was briefly a member of the European Parliament for the East Midlands region in the UK as part of the Conservative Party.  Annunziata continues to write  as a freelance journalist.