May 6 (Reuters) – Britain’s Smith+Nephew on Wednesday missed first-quarter underlying revenue growth expectations, sending its shares down 5%, stoking fears about the medical products maker’s outlook and overshadowing a $500 million share buyback.
The group posted underlying revenue growth of 3.1% for the three months that ended on March 28, just under expectations of 3.2% from a company-compiled poll. In the fourth quarter that ended in December, growth was 6.2%.
Smith+Nephew, which makes orthopaedic implants and wound dressings, is looking to accelerate growth after a three-year turnaround focused on restructuring and cost cuts to ease margin pressure from inflation and supply chain disruptions.
Despite the challenges, the company reiterated its annual outlook for underlying revenue growth of around 6% and organic trading profit growth of around 8%, as it expects a boost in the second half of the year from newer launches and other efforts.
However, at least two brokerages warned of possible outlook downgrades for the year.
Smith+Nephew shares were down 3% at 1,124 pence at 0731 GMT.
U.S. tariffs are expected to have a $60 million impact on trading profit in 2026, it said. Changes to a U.S. reimbursement policy for skin substitutes could also weigh on its wound business, while its biggest orthopaedics unit is still recovering.
Its operations in the Middle East also add to uncertainty.
In the quarter, Smith+Nephew’s sports medicine unit posted 6.7% underlying growth, but its orthopaedics business, accounting for about 40% of sales, delivered growth of just 0.8% after U.S. knee implants fell 10.3%.
(Reporting by Nithyashree R B in Bengaluru; Writing by Pushkala Aripaka; Editing by Sherry Jacob-Phillips, Subhranshu Sahu and Thomas Derpinghaus)
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