Shares of Smith & Nephew (FTSE:SN, NYSE:SNN) are up nearly 4% today after the British health products giant posted sales and earnings increases for the 1sst quarter.
Smith & Nephew reported profits of $161 million, or 19.4¢ per diluted share, on sales of $1.08 billion during the 3 months ended March 31. That’s a 3.2% bottom-line increase and a 2.3% revenues boost, compared with the same period last year.
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"2012 is a critical year for implementing our new strategic priorities. Our plans to progress the structural changes, additional investments and, of course, greater efficiencies, are now underway. Throughout Smith & Nephew, at every level, there is a clear sense of direction, as we work to reshape the Group for future growth," CEO Olivier Bohuon said in prepared remarks.
Bohuon, hired last year to turn the ailing firm around, initiated 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.
Smith & Nephew said its knee implant sales were up 6%. Its negative-pressure wound therapy business has "taken around 20% of the European NPWT market," according to a regulatory filing.
Sales in developed markets rose by 2%, according to the filing, with emerging and internation markets up 12%.
"In the BRIC countries we delivered revenue growth in excess of 20%," the company said. "We are performing in-line with our expectations and our guidance for the full year, provided last quarter, is unchanged. As stated, the phasing of some costs, which has had a positive impact on trading profit margin in Q1, is likely to have the opposite effect on the Q2 trading profit margin.
Smith & Nephew reaffirmed its guidance for a "modest increase" in trading profits for the year.
SNN shares were trading at $50.85 as of about 12.30 p.m. today on Wall Street, up 3.9%; in London, SN shares closed up 4.0% at nearly £6.30.
