Smith and Nephew beats first-quarter forecasts

Profits at medical technology group Smith and Nephew beat both analysts' and management forecasts in the first quarter of 2012, which it said was down to the actions being taken to reshape the company.

Trading profit in the three months to March 31st increased by 5% year-on-year to $252m. US broker Jefferies had estimated a figure closer to $235m. Meanwhile, the trading profit margin improved by 50 basis points to 23.3%.

Meanwhile, revenue totalled $1,079m, 2% above the $1,055m reported in the first quarter of 2011. The underlying growth was 3%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The Advanced Surgical Devices and Advanced Wound Management divisions both saw growth in revenue, profit and margins in the period.

Established markets (US, Europe, Canada, Japan, Australia and New Zealand) increased revenue by 2%, while the Emerging and International Markets saw growth of 12%.

"2012 is a critical year for implementing our new strategic priorities," said Chief Executive Officer Olivier Bohuon. "Our plans to progress the structural changes, additional investments and, of course, greater efficiencies, are now underway. Throughout Smith & Nephew, at every level, there is a clear sense of direction, as we work to reshape the group for future growth."

Among these 'strategic priorities', the group said it is continuing to invest in improving efficiency and has commenced a significant Process Optimisation project in Europe.

Net debt fell to just $28m from $351m.

Shares were 3.14% higher at 624.5p in early trading on Thursday.

BC