(Reuters) - Smith & Nephew nudged up its annual revenue growth forecast on Thursday after the medical products maker reported its best quarter in more than three years on increased demand from newer markets, sending its shares up 3.5 percent.
Emerging markets, especially China, have been a bright spot for the company as its mature markets, including the United States which accounts for about half of its revenue, stabilise after a shaky start to last year.
The company, which makes hip and knee implants as well as wound care products, reported underlying sales growth of 4.4 percent in the quarter ended March 30, the highest since at least the fourth quarter of 2015.
Growth of 15.3 percent in emerging markets powered Smith & Nephew's total revenue to $1.20 billion (£919.4 million), in line with analysts' expectations, according to a company-compiled consensus here
Demand from emerging markets will continue to lift the company as patient populations grow and medical expertise improves, Chief Executive Officer Namal Nawana told Reuters.
“As clinicians (in emerging markets) get trained to do more sophisticated procedures like joint replacement or sports medicine procedures ... we see these as great tailwinds.”
The strong first-quarter showing encouraged the company to lift its 2019 underlying growth expectation to the upper half of its previous 2.5-3.5 percent forecast range.
FTSE-100 member Smith & Nephew also benefited from 5.3 percent growth in its sports medicines unit.
Under Nawana’s stewardship, Smith & Nephew - no stranger to M&A talks - has been pushing to grow through deals. The CEO was appointed in April last year in part for his deal-making expertise and knowledge of the U.S. market.
In March, Smith & Nephew bought U.S.-based regenerative medicine maker Osiris Therapeutics for $660 million.
Reporting by Pushkala Aripaka and additional reporting by Samantha Machado in Bengaluru; Editing by Shounak Dasgupta and Mark Potter