Smith & Nephew Beats on Both Top and Bottom Lines

Smith & Nephew (NYSE: SNN  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Smith & Nephew beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share stayed the same.

Gross margins shrank, operating margins dropped, net margins increased.

Revenue details
Smith & Nephew reported revenue of $1.08 billion. The 14 analysts polled by S&P Capital IQ predicted net sales of $1.07 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.08. The four earnings estimates compiled by S&P Capital IQ predicted $1.00 per share. GAAP EPS of $0.16 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.1%, 80 basis points worse than the prior-year quarter. Operating margin was 19.8%, 460 basis points worse than the prior-year quarter. Net margin was 13.2%, 50 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.06 billion. On the bottom line, the average EPS estimate is $0.95.

Next year's average estimate for revenue is $4.37 billion. The average EPS estimate is $3.85.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 113 members out of 123 rating the stock outperform, and 10 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Smith & Nephew a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Smith & Nephew is hold, with an average price target of $54.73.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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