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UK's Smith & Nephew misses Q3 revenue estimates, cuts outlook on slower US orthopaedics market

By Reuters News


Overview

  • UK medical technology firm's Q3 revenue grew 3.4% yr/yr but missed analyst expectations

  • Company cut full-year revenue and profit growth guidance due to slower US Orthopaedics

  • $500 mln share buyback on track, with $250 mln completed by end-Q3


Outlook

  • Company now expects full-year underlying revenue growth of around 3%, down from around 4%

  • Company expects full-year trading profit growth of around 4%, with trading profit near $1.25 bln

  • Company sees full-year free cash flow of around $750 mln, with cash conversion near 95%


Result Drivers

  • SPORTS MEDICINE & ADVANCED WOUND DEVICES - Co said double-digit growth in Sports Medicine Joint Repair and strong performance in Advanced Wound Devices drove Q3 results

  • ORTHOPAEDICS PRESSURE - Co said US Orthopaedics, especially Hips and Knees, continued to face weak market conditions, limiting overall growth

  • NEWER PRODUCTS - Co said recent product launches contributed over half of Q3 growth, with several products achieving double-digit growth


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Miss

$1.55 bln

$1.57 bln (6 Analysts)


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 13 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the medical equipment, supplies & distribution peer group is "buy."

  • Wall Street's median 12-month price target for Smith & Nephew PLC is GBp1,220.00, about 9.2% above its November 3 closing price of GBp1,117.50

  • The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago


Reuters Recommended Reads

  • Nov 2 - Denmark medical devices maker Coloplast's Q4 revenue rises

  • Nov 3 - Germany's Fresenius Medical says Q3 results weighed by China; narrows forecast

  • Nov 3 - AtriCure Q3 revenue beats expectations on strong sales of pain management and appendage devices


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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