Smith & Nephew expects Q1 revenue to be down 8% amid coronavirus

Smith & Nephew (NYSE:SNN) announced today that it is withdrawing its 2020 full-year financial guidance and projecting a sizeable decline in first-quarter revenue growth as a result of the COVID-19 pandemic.

The London-based medtech giant’s guidance, issued on Feb. 20, assumed a normalization of the coronavirus outbreak early in the second quarter. However, given the rapid expansion of the virus beyond its origin in China, Smith & Nephew determined that its projection of underlying 2020 revenue growth between 3.5% and 4.5% is no longer accurate.

Smith & Nephew said it is too early to determine the overall impact of COVID-19 on the company’s business, and it can’t predict how long the situation will last or the pace of normalization that follows. As a result, it won’t update the year’s guidance until things become clearer.

The company said its first-quarter results will still be reported on May 6, with a projected revenue decline of -8%. It also anticipates that second-quarter revenue and first-half trading margin will take a hit compared to the previous year’s results.

Elective procedures have restarted in China but remain below pre-outbreak levels, the orthopedic and wound care treatment developer said in a news release. Plus, in the U.S. and Europe, various policies implemented have stopped all but the most urgent surgical procedures, limiting the company’s ability to do business.

Last month, Smith & Nephew froze all but the most crucial new hires, slowed some planned capital expenditure and initiated other actions to save money in areas including travel, events, advertising, promotion and consultancy in an effort to offset the financial impact of the virus.

By | MassDevice

Image Credit: Smith & Nephew

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About Peter Coffaro 799 Articles
A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the orthopedic industry. Recognized by MedReps.com as one of the top medical sales influencers in the industry; he has 10 years of combined sales management experience and has held positions as a Director, General Manager and Distributor. Peter has worked for some of the top orthopedic companies in the world - Zimmer, DePuy and Stryker. He is also the founder of OrthoFeed: a popular blog that covers orthopedic news and emerging medical technologies. Peter is a three-time Hall of Fame award winner at Johnson and Johnson and has an extensive background in organizational development, business development, sales management, digital marketing and professional education. Peter holds a B.S. degree in Biology from Northern Illinois University.

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