Smith & Nephew PLC (LON:SN.) shares rose on Thursday after the medical technology firm said it is on track to deliver in its full-year guidance as it reported solid growth in third-quarter revenue thanks to strong demand in the US and emerging markets.
In a brief trading update, the FTSE 100-listed group said its third-quarter revenue was US$1.169bn, up 2% on a reported basis and 3% on an underlying basis.
The firm said quarterly underlying revenue growth was 4% in the US and 10% in emerging markets.
The artificial knees and hips maker forecast that its 2018 underlying revenue would be in the lower half of the 2% to 3% guidance range, but said it expected its trading profit margin to be above last year's thanks to improved cost controls and a favourable legal settlement.
Namal Nawana, S&N’s recently appointed chief executive officer, said: "These results were achieved whilst successfully redesigning how we will run the company. There is still more to do, and I am pleased with the pace of progress and engagement across the organisation."
Hips and knees growth
In a note to clients, analysts at UBS commented: “Both Hips & Knee growth was 4% underlying, in line with the acceleration management expected but ahead of cons in our view.
“However weakness in Europe and Wound Bioactives (-7%) means that management now guides to the bottom end of the previous range of 2-3% underlying revenue growth.”
They added: “Investors are looking for cost control, but revenue guidance may be a focus.”
UBS reiterated a ‘neutral’ stance and 1,340p per share 12-month price target on Smith & Nephew.
In late morning trading in London, the bluechip stock was 6.7% higher at 1,359p.
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