Smith & Nephew rises on better-than-expected results, announces layoffs

Smith & Nephew

Smith & Nephew (NYSE:SNN) is up about 4% on Wall Street this morning after reporting stronger-than-expected results for the 4th quarter and full year.

The British medical products giant posted profits of $279 million, or 16 cents per share, on sales of $1.12 billion for the 3 months ended Dec. 31, 2011. That’s a 3.7% addition to the top line, although profits were flat at a 0.4% gain, compared with profits of $278 million, or 21 cents per share, on sales of $1.07 billion during the same period in 2010.

For the full year, profits were $961 million, or 65 cents EPS, on sales of $4.27 billion, down 0.8% and up 7.8%, respectively, compared with profits of $969 million, or 69 cents EPS, on sales of $3.96 billion during 2010.

The news sent SNN shares up 4.3%, to $50.55, on The Street this morning. In London, Smith & Nephew shares had gained 4.6%, rising to £6.41, as of about 3:40 p.m. local time.

"I am pleased to report that we grew revenue and exceeded our Q4 trading profit margin expectation. Our endoscopy and advanced wound management businesses delivered strong revenue growth and excellent trading profit margins, with advanced wound management growing at more than twice the market rate. In orthopedics, our rigorous management actions led to a significant improvement in Q4 profitability," CEO Olivier Bohuon said in prepared remarks. "We also made good progress delivering against our strategic priorities, reaching important milestones in finalizing management teams and streamlining our operations. We are building momentum every day and I am confident that the result will be a business that is stronger, growing faster, better balanced and fit and effective for the future."

Smith & Nephew also said it plans to cut 7% of its global workforce, or about 770 workers, over the next 3 years, with 220 cuts already made. The moves, aimed at saving $150 million annually, are expected to cost $160 million in cash and $40 million in non-cash expenses.

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