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Investing.com -- Smith+Nephew’s Q1 results posted stronger-than-expected underlying revenue growth of 3.1%, with continued strength in the U.S. Orthopaedics and Sports Medicine offsetting challenges in China, sending its shares up by over 6% on Wednesday.
The British medical equipment manufacturing company reiterated its full-year guidance, projecting 5% underlying revenue growth and 19-20% margins, while accounting for a $15-20 million tariff impact.
The company’s total revenue for Q1 reached $1.41 billion, a 1.6% increase on a reported basis and a 3.1% increase on an underlying basis.
The growth exceeded consensus expectations, driven by operational improvements and product innovation. However, the company noted a 150 basis point drag from foreign exchange fluctuations.
Orthopaedics posted 3.2% underlying growth, led by strong performance in Other Reconstruction and Trauma & Extremities.
While Hip Implants saw a slight decline, the overall segment remained solid. Sports Medicine & ENT grew 2.4% underpinned by strong demand for REGENETEN Bioinductive Implants and the HALO Wand.
Advanced Wound Management achieved 3.8% underlying growth, with Devices driving performance, though Bioactives faced some volatility due to SANTYL.
The U.S. market contributed $759 million, up 3.6% year-over-year. Other Established Markets grew 5.0% underlying.
In contrast, Emerging Markets were impacted by pricing pressures in China, though performance excluding China remained strong.
The company reaffirmed its full-year 2025 guidance, anticipating 5% underlying revenue growth and a 19-20% trading profit margin.
It expects a $15-20 million impact from tariffs and is focused on mitigating this through supply chain adjustments and cost-saving measures.
The company also noted that margin expansion should accelerate in the second half of the year as challenges in China decrease.
Chief executive Deepak Nath in a statement said, "we have delivered a good start to the year with the operational improvements delivered through the 12-Point Plan driving growth across our portfolio. Whilst uncertainties exist around the imposition of tariffs, we remain confident in our outlook for another year of strong revenue growth."