LONDON: Smith & Nephew, Europe’s biggest artificial hip and knee maker, reported a 7 percent drop in full-year trading profit, missing average analysts’ forecasts, as tough market conditions in China and Gulf states kept growth in check.
The company reported trading profit of $1.02 billion on revenue that was 2 percent higher on an underlying basis at $4.67 billion.
Chief Executive Olivier Bohuon said the company had delivered growth in 2016, but “not at the level we had wanted.”
“Market conditions in China and the Gulf states together shaved more than a percentage point of growth off the group in 2016,” he said in a statement on Thursday, although he added that China had returned to growth in the second half.
Smith & Nephew said it expected better growth in 2017, with underlying revenue increasing by 3-4 percent and its trading profit margin increasing by 20-70 basis points.
Shares in the company, which also makes treatments for chronic wounds such as leg ulcers and pressure sores, fell 4 percent to eight week lows of 1,143 pence after the results.
Analysts at J.P.Morgan Cazenove said the midpoint of the guidance would lead to a 1.6 percent downgrade in revenue consensus, which stood at $4.82 billion, and around a 2 percent hit on trading profit forecasts.
They said the downgrades could see the shares trading nearer the 11 pounds level than 12 pounds in the short term.
Analysts were expecting the company to report revenue of $4.69 billion and trading profit of $1.04 billion, according to a company-supplied consensus.
The company reported trading profit of $1.02 billion on revenue that was 2 percent higher on an underlying basis at $4.67 billion.
Chief Executive Olivier Bohuon said the company had delivered growth in 2016, but “not at the level we had wanted.”
“Market conditions in China and the Gulf states together shaved more than a percentage point of growth off the group in 2016,” he said in a statement on Thursday, although he added that China had returned to growth in the second half.
Smith & Nephew said it expected better growth in 2017, with underlying revenue increasing by 3-4 percent and its trading profit margin increasing by 20-70 basis points.
Shares in the company, which also makes treatments for chronic wounds such as leg ulcers and pressure sores, fell 4 percent to eight week lows of 1,143 pence after the results.
Analysts at J.P.Morgan Cazenove said the midpoint of the guidance would lead to a 1.6 percent downgrade in revenue consensus, which stood at $4.82 billion, and around a 2 percent hit on trading profit forecasts.
They said the downgrades could see the shares trading nearer the 11 pounds level than 12 pounds in the short term.
Analysts were expecting the company to report revenue of $4.69 billion and trading profit of $1.04 billion, according to a company-supplied consensus.
