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Smith+Nephew PLC (LSE:SN, NYSE:SNN), a global medical technology company valued at $12.38 billion, reported a positive start to 2025 with a first-quarter revenue of $1,407 million, marking a 1.6% increase from the $1,386 million seen in the same period last year. The company’s stock has shown resilience, delivering a 14.38% return over the past year. According to InvestingPro analysis, Smith+Nephew is currently trading below its Fair Value, suggesting potential upside opportunity. The company’s underlying revenue growth was 3.1%, despite a -150bps impact from foreign exchange headwinds. This growth was attributed to operational improvements, recent product launches, and despite continued headwinds from China and one less trading day year-over-year.
Orthopaedics saw an underlying revenue growth of 3.2%, driven by improved performance in US Hip and Knee Implants and growth from Other Reconstruction and Trauma & Extremities. Sports Medicine & ENT grew by 2.4% on an underlying basis, with strong performance in Established Markets from Sports Medicine Joint Repair and growth from Arthroscopic Enabling Technologies, offset by China’s market challenges. Advanced Wound Management reported a 3.8% increase in underlying revenue, fueled by foams and NPWT, offset by expected volatility in SANTYL.
The company’s full-year 2025 guidance remains unchanged, with an anticipated underlying revenue growth of around 5.0% and a significant trading profit margin expansion to between 19.0% and 20.0%. The unchanged outlook includes an expected net impact of $15 to $20 million from tariffs in 2025, based on announced measures and mitigations.
Deepak Nath, Chief Executive Officer, expressed confidence in the company’s full-year outlook, citing the operational improvements from the 12-Point Plan as a growth driver across the portfolio. Key platforms such as CORI, EVOS, REGENETEN, and the Negative Pressure Wound Therapy portfolio delivered strong double-digit growth in the quarter. Nath also mentioned that headwinds from China are believed to have passed their peak impact.
Smith+Nephew’s performance in Established Markets was strong, with 4.1% underlying growth, while Emerging Markets, excluding China, showed a 14.7% growth. The company continues to face challenges in China due to regulatory headwinds but expects to overcome these in the second quarter.
The report is based on a press release statement from Smith+Nephew.
In other recent news, Smith+Nephew reported strong financial results for 2024, with revenue increasing to $5.81 billion from $5.55 billion in 2023, reflecting a 5.3% underlying revenue growth. The company’s trading profit also rose by 8.2% to $1.049 billion, with a profit margin improvement to 18.1%. Looking forward, Smith+Nephew expects further revenue growth and an increase in trading profit margin for 2025, aiming for a margin between 19.0% and 20.0%.
In analyst updates, HSBC downgraded Smith+Nephew from Buy to Hold, citing challenges in the US knees and hips market despite the company’s new 12-point program. Similarly, UBS downgraded the stock to Neutral, adjusting the price target to GBP1.25, due to the stock’s recent valuation adjustments and a more cautious earnings outlook.
Smith+Nephew also announced the release of its first-quarter trading report for 2025, scheduled for April 30, 2025, which will be followed by a conference call for analysts. The company’s upcoming full-year results for 2024 are set to be released on February 25, 2025, with expectations of providing further insights into its strategic direction amid global market conditions.
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