(Reuters) -British medical products maker Smith+Nephew announced on Tuesday a $500-million share buyback for the second half, after reporting a better-than-expected 11.2% growth in first-half profit, as its turnaround plan begins to show results.
Shares of Smith+Nephew jumped 14% in early trading.
The company, which makes orthopaedic implants, wound dressings and other surgical aids, has been aggressively cutting costs and launching products amid a recovery in its biggest market, the United States, offseting weaker demand in China.
Smith+Nephew’s orthopaedics segment reported 5% underlying revenue growth in the second quarter, while its Sports Medicine & ENT business grew 5.7% and Advanced Wound Management unit saw a 10.2% rise.
“The operational improvements we have made under the 12-Point Plan are increasingly translating into better financial performance,” CEO Deepak Nath said in a statement.
The London-based company is benefiting from a rise in consumers taking more elective surgeries across key markets, excluding China, where demand headwinds and a bulk-buying programme is weighing on its margins and volumes.
Still, Smith+Nephew maintained its full-year outlook and expects higher margin growth in the second half of the year. It continues to expect an impact of $15 million to $20 million from tariffs.
It posted a trading profit of $523 million for the six-month period ended June 28, beating analysts’ estimates of $496 million, according to a company-compiled consensus.
(Reporting by Unnamalai L in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)
