UK medical device specialist Smith & Nephew has posted better-than-expected results for the second quarter, with revenues climbing 12% to £351 million and earnings per share up 16% to £5.83. In terms of divisions, orthopaedics revenues rose 18% to £175 million, while the US business did particularly well, with a 22% revenue increase to £108 million.
The company’s endoscopy business also performed well, with sales up 7% to
£82 million, while its wound management unit posted a 6% turnover to £94 million. However the latter unit experienced a 4% reduction in US sales to £19 million and the company revised down its forecast for wound management to 6% from 7%.
S&N also noted that as part of a cost-cutting programme, the firm intends to close one of its three US endoscopy facilities and will take a £9 million charge in the third quarter.
The performance of the wound management division took some of the shine off the results and analysts at Dresdner Kleinwort Wasserstein said that “positive share price momentum” will be constrained by concerns over growth at the unit.
However the other units are performing well and DKW has reiterated its buy recommendation on S&N’s stock.