Artificial hips and knees maker Smith & Nephew PLC (LON:SN.) has lowered its full year revenue guidance after a weaker-than-expected first quarter.
Shares slumped 6.5% to 1,309p in morning trading.
The company said revenue rose to US$1.19bn in the first quarter ended March 31, up 5% on the previous year on a reported basis due to favourable foreign exchange rates. On an underlying basis revenue was flat.
Analysts were expecting total revenue of US$1.22bn and underlying revenue growth of 1.6%.
One fewer trading day than last year, softer market conditions in established markets and a poor performance in the company’s advanced wound bioactives business offset strong growth in emerging markets.
“We expect trading conditions to return to more normal levels, which, combined with the continued rollout of new products and our sustained emerging markets performance, gives us confidence in delivering an improving performance trend during the remainder of the year,” said outgoing chief executive Olivier Bohuon.
Bohuon, who is being replaced by Namal Nawana in May, added: “With our portfolio, platform and people I believe the company has a successful and exciting future led by Namal, and I would like to thank all employees for their dedication during my time as chief executive."
The group said the worse-than-expected performance from advanced wound bioactives has made it “more cautious” in its outlook and now expects underlying revenue growth of 2-3%, down from its February guidance of 3-4% growth.
READ: Knee implants helped revenues and profits to kick in at Smith & Nephew last year
Sales growth is expected to be weighted to the second half with trading margins improving.