Smith & Nephew Beats on Both Top and Bottom Lines

Smith & Nephew (NYSE: SNN  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Smith & Nephew beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share stayed the same.

Gross margins shrank, operating margins dropped, net margins increased.

Revenue details
Smith & Nephew reported revenue of $1.08 billion. The 14 analysts polled by S&P Capital IQ predicted net sales of $1.07 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.08. The four earnings estimates compiled by S&P Capital IQ predicted $1.00 per share. GAAP EPS of $0.16 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.1%, 80 basis points worse than the prior-year quarter. Operating margin was 19.8%, 460 basis points worse than the prior-year quarter. Net margin was 13.2%, 50 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.06 billion. On the bottom line, the average EPS estimate is $0.95.

Next year's average estimate for revenue is $4.37 billion. The average EPS estimate is $3.85.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 113 members out of 123 rating the stock outperform, and 10 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 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 $54.73.

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