U.K. healthcare giant Smith & Nephew (FTSE:SN, NYSE:SNN) ended its 2013 fiscal year with a bang, reporting strong growth in sales and a double-digit boost in profits.
The company credited some of the growth to progress in emerging and international markets, saying its R&D bets and acquisitions had paid off with a 16% bump in sales for the regions.
"China, now our 6th largest global market, delivered revenue growth of more than 30% in 2013. Our success here is the model for what we can achieve in other countries," according to a financial report. "During the year we invested in the sales force and infrastructure in growth markets such as Mexico and the Middle East, with good results. We launched many existing products into new markets, such as traditional NPWT and PICO. We also acquired distributors in Turkey and Brazil, moving us closer to our customers to ensure we are able to anticipate their needs and offer a fuller range of products."
Smith & Nephew posted profits of $162 million, or 18¢ per diluted share, on sales of $1.18 billion during the 3 months ended December 31. That compared with profits of $140 million, or 16¢ per share, on sales of $1.08 billion during the same period the previous year. Adjusted for special items, per-share earnings amounted to about 23¢.
The company touted its pipeline in trauma and sports medicine, saying it’s planning to bring "many exciting new products to market," and that the year ahead should be stable-to-improving in the U.S., challenging in Europe and growing in emerging and international markets.
For the full year, Smith & Nephew posted a 23% dip in profits on a 5.2% boost in sales. The company reported profits of $556 million, or 61¢ per diluted share, on sales of $4.35 billion. That compared with $721 million in profits, or 80¢ per share, on sales of $4.14 billion in 2012.
The device maker announced recently that it made a $1.7 billion dollar offer to acquire sports medicine and minimally invasive surgical devices maker ArthroCare (NSDQ:ARTC). Smith & Nephew may face some rivals in that bid, with ArthroCare’s shares rising enough in recent days to potentially lure another buyer to the table.
ArthroCare has an attractive portfolio of sports medicine technologies and minimally invasive surgical systems, and the recent settlement of a Dept. of Justice fraud case prompted speculation that the company was ripe for a buyout. Industry titans such as Johnson & Johnson (NYSE:JNJ) and Stryker (NYSE:SYK) are among the most likely to get into the game and attempt to out-bid Smith & Nephew, J.P. Morgan and other analysts told Bloomberg.
Smith & Nephew also announced today the pending retirement of board members Richard De Schutter, a senior independent director and non-executive director, and Ajay Piramal, who will retire as non-executive director. They will leave the company at the conclusion of its general meeting in April, according to an SEC filing.
