Smith and Nephew results “slightly lower than expected”

Medical technology company Smith & Nephew has announced its first quarter results, describing sales as being “slightly lower than expected” ? and that the second quarter is likely to be difficult.

The company reported that first quarter revenue increased by six per cent, up to $643 million (357 million pounds). Smith & Nephew cites its disappointment as being down to healthcare budget constraints in the US, UK and Germany, as well the restructuring of its orthopaedic management and sales force into separate divisions.

Its orthopaedic division had growth of two per cent in the US because of the timing of restructuring and timing of new products, which “inhibited” new business, according to Smith & Newphew. Other products showed better signs of growth, including endoscopy, knee and hip products, orthopaedic trauma and advanced wound management.

Sir Christopher O’Donnell, chief executive of Smith & Nephew, commented: “At the time of our preliminary results for 2005 we indicated that market conditions had become tougher. This has proved to be the case in Q1 and is likely to continue during 2006.”

However, he added: “We expect trading to improve in the second half as we roll out a number of new products. With one of the strongest new product launch programmes we have had for many years, we remain confident in our medium and long-term growth prospects.”

Smith & Nephew claims to be the world leader for arthroscopy and second in the world for trauma products. It employs 8,000 people across 33 countries.

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