By Jason Douglas
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- U.K. orthopedics firm Smith & Nephew PLC (SN.LN) Friday reported a 73% rise in third-quarter net profit and said there are signs the market for new hips and knees is stabilizing.
The company said U.S. revenue at its orthopedic reconstruction unit grew close to the market rate of about 5% on year and by 2% worldwide. The market is showing signs of stabilizing following sequential fall in previous quarters, Smith & Nephew said.
It said third quarter net profit rose to $128 million from $74 million a year earlier, on revenue down 2% at $915 million. Earnings per share, excluding restructuring, amortization and other costs, were 16.8 cents, beating forecasts.
Analysts forecast revenue of between $887 million and $927 million and adjusted earnings per share of between 13 cents and 14.5 cents, according to the company.
Sales growth in the roughly $11 billion a year market for replacement joints slowed during the recession because U.S. patients put off operations.
Smith & Nephew was disproportionately hit because key products like its Birmingham Hip Resurfacing system, or BHR, is typically used in younger people worried about losing jobs or taking too much time off work, rather than retirees.
Friday, Smith & Nephew said third quarter global sales of its replacement hip products grew 2% on year.
The company's view echoes those of U.S. rivals like Zimmer Holdings Inc. (ZMH), Johnson & Johnson (JNJ) and Stryker Corp. (SYK). All signalled a slight improvement in sales of hips and knees during the third quarter.
Also Friday, Smith & Nephew said it wasn't satisfied with its orthopedic trauma unit's third quarter performance. Revenue there fell 5% on year, compared to a 7% growth in the market, it said.
Company Web site: www.smith-nephew.com
-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com