By Yamini Kalia
(Reuters) -UK medical products maker Smith+Nephew beat first-quarter revenue growth expectations and maintained its full-year sales and profit margin forecasts on Wednesday, despite the potential impact of U.S. tariffs, driving shares up over 7%.
The company, which makes orthopaedic implants, wound dressings and other surgical aids, said it will likely take a tariff-related hit of $15 million to $20 million on its profit this year.
While two-thirds of Smith+Nephew’s U.S. sales come from locally made products, the company is working to mitigate the impact of tariffs by adjusting its supply routes and changing its product mix, among other measures.
One of its main manufacturing sites for its wounds business is in Suzhou, China.
On a call with analysts, CFO John Rogers said the company was working with industry groups like AdvaMed to explore the potential for exemption from the tariffs.
Smith+Nephew shares rose as much as 7.5% to 1,071 pence.
The London-based firm said weak demand in China also continued to weigh on the company.
“While unhelpful, recent China setbacks seem temporary and Smith+Nephew is slowly reaping the benefits from portfolio shifting toward faster-growth segments and recent R&D efforts,” Jefferies analysts said in a note.
Smith+Nephew’s underlying revenue grew 3.1% in the quarter beating analysts’ estimate of 2.1% in a company compiled poll.
It expects full-year underlying revenue growth of around 5%, with trading profit margin to be in the range of 19% to 20%.
(Reporting by Yamini Kalia in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D’Souza, Kirsten Donovan)
