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Investing.com -- Smith & Nephew (LON:SN) saw its shares soar 15% on Tuesday after it reported an 11.2% rise in first-half trading profit on Tuesday, supported by cost reductions and a rebound in its U.S. operations, which helped offset weaker demand from China.
The medical products maker posted trading profit of $523 million for the six months ended June 28, ahead of the $496 million expected by analysts. The trading profit margin improved to 17.7%, up from 16.7% a year earlier.
Revenue for the period rose to $2.96 billion, compared with $2.82 billion in the same period last year.
Operating profit increased 30.6% year-on-year to $429 million, while earnings per share reached 33.5 cents.
In the second quarter, organic sales growth (OSG) accelerated to 6.7%, ahead of the 4.5% consensus. Reported growth was 7.8%, including a 110 basis point benefit from foreign exchange.
Jefferies analysts said the company’s Q2 results "blew up expectations,"
Smith & Nephew reaffirmed its full-year 2025 guidance.
"Despite tougher comps in H2, the company seems on track to deliver the further step up expected in 2H25 to reach the reiterated FY25 guide of ~5% OSG," analysts wrote.
The company announced a new $500 million share buyback to be executed in the second half of the year.
"This additional return of value will be undertaken in the second half of 2025 and reflects strong cash generation and balance sheet resulting from the 12-Point Plan transformation," Smith & Nephew said in the announcement.