The London-based orthopedics and wound care giant posted a sales decline of 5.7%, dropping from $1.2 billion in sales this time last year to $1.1 for the quarter ended March 28, 2020.
In March, the company determined that its projection of underlying 2020 revenue growth between 3.5% and 4.5% was no longer accurate, projecting a revenue decline of -8%. While the reported decline was smaller, the underlying revenue decline came in close to the projection at -7.6%.
Smith & Nephew noted that its April revenue fell -47% on an underlying basis after the suspension of elective procedures in most markets during the COVID-19 pandemic. However, this was somewhat offset by improved trading in China.
The company’s orthopedics segment took an -8.3% hit, its sport medicine & ENT business was down -9.5% and its advanced wound management arm was down 4% amid the pandemic.
“Countries and healthcare systems around the world are facing an unprecedented challenge, and we are seeing a significant short-term impact on Smith & Nephew,” CEO Roland Diggelmann said in a news release. “The recovery in China is encouraging, as is the restart of elective surgeries in many other countries, and especially within the US. While there is still much uncertainty, Smith & Nephew has the financial strength to withstand this period and, as demand increases, we are ready to step up and support customers through our robust supply chain, innovative products and some new ways of working.”
Smith & Nephew said it anticipates upwards of $200 million in cost-saving measures during 2020. The company withdrew its guidance due to the uncertainty of the impact of COVID-19 but expects its second-quarter revenue and first-half trading margin to be down year over year.
SNN shares were up 0.5% at $40.12 per share in late-afternoon trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up as high as 0.9% this morning but was even in the late afternoon.