Smith & Nephew shares surged on Tuesday after the medical technology company said fourth quarter sales rose 6.8% on an underlying basis.
Their sports medicine and wound management business units performed particularly well and accounted for a large proportion of the top line underlying growth.
The Ear, Nose and Throat unit (ENT) unit enjoyed the highest growth in percentage terms in the fourth quarter, rising 17% to $41m.
Before the impact of foreign exchange, full year sales grew 4.8% but reported revenue including negative FX headwinds rose 0.1% to $5,215m.
Nonetheless the underlying strength buoyed shares with Smith & Nephew gaining over 6%.
“Smith & Nephew’s struggles to return to profit growth continue, with already downgraded margin guidance for 2022 effectively being pushed out another year as inflation continues to bite,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
“However, an uptick in top line growth at the end of 2022 across all divisions is encouraging. Despite ongoing downward pressure on pricing from the previously highlighted procurement policy in China, work to fix the Orthopaedics division, Smith & Nephew’s largest, is starting to bear fruit.”
“Smith and Nephew continues to innovate and this is its biggest weapon for targeting higher market share. In Orthopaedics we see its cementless knee systems and work in robotic surgery as core differentiators.”