Smith & Nephew 2Q Net Profit +15%; Deferrals Greater In Young
LONDON (Dow Jones) Medical technology company Smith & Nephew PLC (SN.LN)
Thursday July 30, 2009 reported a 15% rise in second-quarter profit, but
said key products like its Birmingham hip resurfacing system are being
disproportionately hit by the recession, as younger people are more likely to
put off surgery than retirees.
Smith & Nephew said sales growth for replacement hips and knees is slow, as
patients continue to put off going under the knife while worries about the
economy persist. Growth in global sales of its knee products was 1% on the year,
while the hip sales declined 1%.
The company said products like its Birmingham hip resurfacing system, or BHR,
and its Journey knee implant have "a greater exposure" to the effects of the
recession because the rate of deferrals for operations is highest among young,
Peers like Stryker Corp. (SYK), Johnson & Johnson (JNJ) and Zimmer Holdings Inc.
(ZMH) have reported a similar softness in the multi-billion dollar a-year market
for new joints.
Smith & Nephew said net profit for the three months to June 28 rose to $118
million from $103 million a year earlier, on revenue down 7% at $926 million.
That’s just ahead of analysts’ average forecast of about $117 million net