Smith & Nephew
The 10-second takeaway
For the quarter ended June 30 (Q2), Smith & Nephew met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share grew significantly.
Gross margins increased, operating margins contracted, net margins grew.
Smith & Nephew reported revenue of $1.03 billion. The 14 analysts polled by S&P Capital IQ predicted a top line of $1.04 billion on the same basis. GAAP reported sales were 4.5% lower than the prior-year quarter's $1.08 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.90. The four earnings estimates compiled by S&P Capital IQ predicted $0.93 per share. GAAP EPS of $0.33 for Q2 were 94% higher than the prior-year quarter's $0.17 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 74.2%, 80 basis points better than the prior-year quarter. Operating margin was 20.4%, 60 basis points worse than the prior-year quarter. Net margin was 28.4%, 1,420 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $985.6 million. On the bottom line, the average EPS estimate is $0.82.
Next year's average estimate for revenue is $4.23 billion. The average EPS estimate is $3.85.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 119 members out of 129 rating the stock outperform, and 10 members rating it underperform. Among 32 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 28 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 $52.28.
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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 positions in the stocks mentioned above. Motley Fool newsletter services recommend Smith & Nephew. 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.