Smith & Nephew 3Q Net Profit +73%; Signs Market Stabilizing
By Jason Douglas, Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- U.K. orthopedics firm Smith & Nephew PLC (SN.LN) Friday
reported a 73% rise in third-quarter net profit and said there are signs the
market for new hips and knees is stabilizing.
The company said U.S. revenue at its orthopedic reconstruction unit grew close
to the market rate of about 5% on year and by 2% worldwide. The market is
showing signs of stabilizing following sequential fall in previous quarters,
Smith & Nephew said.
It said third quarter net profit rose to $128 million from $74 million a year
earlier, on revenue down 2% at $915 million. Earnings per share, excluding
restructuring, amortization and other costs, were 16.8 cents, beating forecasts.
Analysts forecast revenue of between $887 million and $927 million and
adjusted earnings per share of between 13 cents and 14.5 cents, according to the
company.
Sales growth in the roughly $11 billion a year market for replacement joints
slowed during the recession because U.S. patients put off operations.
Smith & Nephew was disproportionately hit because key products like its
Birmingham Hip Resurfacing system, or BHR, is typically used in younger people
worried about losing jobs or taking too much time off work, rather than
retirees.
Friday, Smith & Nephew said third quarter global sales of its replacement hip
products grew 2% on year.
The company's view echoes those of U.S. rivals like Zimmer Holdings Inc. (ZMH)
, Johnson & Johnson (JNJ) and Stryker Corp. (SYK). All signalled a slight
improvement in sales of hips and knees during the third quarter.
Also Friday, Smith & Nephew said it wasn't satisfied with its orthopedic
trauma unit's third quarter performance. Revenue there fell 5% on year, compared
to a 7% growth in the market, it said.
Company Web site: www.smith-nephew.com
-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@
dowjones.com
(END) Dow Jones Newswires
11-06-090238ET
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