(Reuters) -British medical products maker Smith & Nephew on Thursday missed market expectations for quarterly revenue due to weakness in its U.S. knee implants business, sending its shares 9% lower.
The company, however, kept its annual revenue and profit expectations unchanged.
Smith & Nephew, over the past three years, has been trying to turn around its business and fix its underperforming orthopaedics segment by phasing out some legacy knee implant brands while investing in robotics and cementless implants.
Positive updates from U.S. peers J&J and Stryker , paired with expectations of a strategy update at its capital markets day in early December, have helped boost the company’s shares in recent weeks, as their turnaround plan nears completion.
“Expectations had risen into the results on the back of decent numbers from J&J and Stryker,” J.P.Morgan analysts said in a note, adding that the lack of an upside surprise would weigh on shares.
The company reported quarterly revenue of $1.50 billion, as compared to estimates of $1.51 billion, according to a company-compiled poll.
Orthopaedics, its largest unit, saw a 4.1% revenue growth in the third quarter, as strength in hip implants offset weaknesses in the knee implant business in the U.S., its biggest market.
Shares fell to 1,268 pence by 0944 GMT, paring gains for the year to about 28%, and were on track for their biggest one-day percentage drop since October 2024.
(Reporting by Rishab Shaju, Yadarisa Shabong and Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala and Vijay Kishore)
