Knees, sports medicine joint repair, and advanced wound management (AWM) helped boost Smith & Nephew ($SNN) to a good first quarter, as revenues rose 3% to $1.08 billion.
The company saw 6% revenue growth in its knee implant franchise, outperforming the market. CEO Olivier Bohuon said the company saw particular growth in Australia and New Zealand, which had a weak quarter last year after the earthquake. Sports medicine joint repair saw growth of 7%, and AWM grew 5%. However, hips continued to drag, with revenues down 2% on "continued headwinds in the metal-on-metal total hip replacement sector," the company said in a statement.
In a theme echoed throughout the device industry, emerging markets are boosting the company. BRIC countries in particular saw strong revenue growth (20%).
An enthusiastic Bohuon praised his company's performance. "Smith & Nephew has had a good first quarter," he said in a statement. "We grew revenue, increased profit and improved our trading profit margin. We saw the first results of our actions to make Smith & Nephew more fit and effective." Bohuon came on board last year as the company started a restructuring program, which includes a workforce reduction that is ongoing.
Still, with the uncertain economic forecast in the U.S., Savvas Neophytou of Panmure said the future could be interesting for Smith & Nephew. "If the consumer and macro environment in the U.S. do not improve for many years, it is our strong view that it will trigger consolidation and note that Smith & Nephew has not been short of suitors in recent years. The company's products and overall offering are excellent," Neophytou said, as quoted by Dow Jones. Last year, Stryker ($SYK) and Biomet were named as potential buyers for the company, but nothing has materialized as of yet.
Meanwhile, at least one other analyst is pretty happy with the U.K.-based company's results. "I'm really quite pleased with the numbers," Cenkos Securities' Navid Malik said in an interview with Bloomberg. "Going into these results, there was a lot of concern about orthopedics. Outside of hips, everything appears to be growing."
- check out the Smith & Nephew statement
- read more from Dow Jones (reg. req.)
- see the Bloomberg story