- Smith & Nephew plc (NYSE: SNN) reinstated full-year guidance after a rise in first-quarter revenues driven by the resurgence of the U.S. hip business, offset by continued weakness in other parts of the company.
- Revenue for the quarter of $1.26 billion grew 11.5% on a reported basis and 6.2% on an underlying basis, including a 3.4% boost from foreign exchange and 1.9% from acquisitions.
- The first quarter orthopedic results were defined by the divergent performance of the knee and hip franchises. Knee sales fell 10.3% Y/Y, driven by a 14.9% drop in the U.S., while revenues from hips grew 9.1% globally and 11.5% in the U.S.
- All three of the company's business units posted their first quarters of underlying growth since 2019.
- The recovery was led by the sports medicine and advanced wound care management units, which grew year over year by 10.4% and 9.3%, respectively.
- Smith & Nephew benefited from lapping the initial impact COVID-19 in 2020, as was shown most dramatically by the 21.8% jump in emerging market revenues over the pandemic-affected first few months of last year. Sales in the U.S. rose 7.1% as restrictions eased throughout the quarter.
- Ex-U.S. established markets was the only geographic region to suffer a drop in sales, extending its losing streak to a fifth straight quarter.
- The 1.8% decline reflected growth in Japan and Australia and the strengthening of the U.K. market, offset by a slowdown in mainland Europe as COVID-19 cases rose.
- Guidance: The management reiterated guidance for the full year and expects underlying revenue growth of 10% to 13% in 2021.
- It sees a trading profit margin in the range of 18.0% to 19.0%.
- Price Action: SNN shares are trading 3.94% higher at $43.42 during market hours on the last check Thursday.
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