Smith & Nephew’s Q1 sales miss the mark

Smith & Nephew (NYSE:SNN) missed expectations with its 1st-quarter revenues, saying sales were off in China and the Middle East, offsetting stronger demand in the U.S. The London-based orthopedics and wound care giant posted sales of $1.14 billion, up 3.0% from Q1 2015; the consensus analyst estimate was for sales of $1.16 billion. Adjusted to exclude the effects of exchange rates and acquisitions, underlying growth was 4%, Smith & Nephew said. SNN shares closed down -1.0% at $34.09 yesterday in New York; in London, SN shares were down -3.3% to £11.26 as of about 7:30 a.m. Eastern. CFO Julie Brown said Chinese de-stocking – an issue dating back to mid-2015 – should ease in the 2nd half of the year. “We expect this to continue into Q2, but then we will have lapped this issue from Q3 onwards,” Brown said. Emerging markets, which account for 13% of total sales, are an important growth opportunity for the group as demand for Western treatment grows. China alone makes up 40% to 45% of its sales in developing economies. Demand growth in China, however, has slowed with the economy, while the Gulf states have weakened because of the prolonged downturn in oil prices. Smith & Nephew affirmed its outlook, saying still expects good underlying growth in 2016. Brown said she still expects adverse currency moves to drag on 2016 margins by about 120 basis points. “Many of the positive trends seen in the 2nd half of 2015 continued to drive good p...
Source: Mass Device - Category: Medical Equipment Authors: Tags: MassDevice Earnings Roundup Orthopedics Wall Street Beat Wound Care Smith & Nephew Source Type: news