Smith & Nephew (FTSE:SN, NYSE:SNN) shares are up slightly in The City and down a tick on The Street, after the British orthopedics giant reported flat profits for 2012 and a slight decline for the 4th quarter, excluding 1-time costs from acquisitions and restructuring.
The London-based medical device company posted profits of $142 million, or 15.8¢ per share, on sales of $1.08 billion during the 3 months ended Dec. 31, 2012, for a top-line gain of 1.4% and a sales decline of 2.6%.
Adjusted to exclude 1-time items, trading profits for the quarter were down 2.5% to $272 million, for adjusted EPS of 21.5¢, a penny ahead of analysts’ expectations.
For the full year Smith & Nephew reported profits of $729 million (up 0.4%), or 80.9¢ per share, on sales of $4.14 billion, amounting to a 25.3% profit gain on a 3.1% sales slide. Trading profits last year were $965 million, for adjusted EPS of 75.4¢, in line with expectations.
"There is no doubt that we are benefitting from implementing our strategic priorities. Our choices to invest in products and geographic areas of higher growth are enabling us to drive greater value from existing resources. Looking at the full year, we generated good revenue and profit growth and a healthy 80 basis points increase in trading profit margin," CEO Olivier Bohuon said in prepared remarks (PDF). "Our confidence in continued strategic progress, coupled with our financial strength, is reflected in the significant 50% uplift in our 2012 dividends."
Smith & Nephew said its revenues in emerging and international markets was up 10%, compared with just 1% in the U.S. and other established markets.
The company said it expects to post lower margins this year, in part due to the medical device tax.
