Smith+Nephew Plc (LSE:SN.) reported third-quarter 2026 revenue of $1.55 billion, up 3.4% on both an underlying and reported basis, but lowered its full-year financial guidance following weaker-than-expected growth in its US Orthopaedics business.
The medical technology group now expects underlying revenue growth of approximately 3% for 2026, down from its previous forecast of around 4%, while anticipated trading profit has been reduced to approximately $1.25 billion.
Third-Quarter Revenue Performance
Group revenue increased to $1.55 billion from $1.50 billion in the corresponding quarter of 2025, supported by growth in Sports Medicine and a recovery in Orthopaedics.
Sports Medicine & ENT revenue rose 8.0% to $507 million, including an 11.1% increase in Sports Medicine Joint Repair to $283 million.
Advanced Wound Management revenue remained broadly unchanged at $454 million, with Advanced Wound Devices growing 10.7% to $110 million. This was offset by an 8.7% decline in Advanced Wound Bioactives, reflecting continued pressure from changes to US reimbursement rules for skin substitutes.
Orthopaedics revenue increased 2.3% to $590 million, supported by international markets and growth in robotics-assisted surgical systems.
US Orthopaedics Remains Under Pressure
Despite returning to overall growth, the Orthopaedics division continued to experience weaker demand in the United States.
US Knee Implants revenue declined 7.3%, reflecting previously lost business and softer market conditions, while US Hip Implants revenue fell 1.0%.
Outside the US, underlying Knee Implants revenue increased 4.0%, while Hip Implants grew 6.0%.
Smith+Nephew said it is continuing to introduce new products and improve commercial performance within Orthopaedics.
The company also confirmed that it previously held discussions with Johnson & Johnson regarding a possible combination involving its Orthopaedics business and Johnson & Johnson’s DePuy Synthes division. Those discussions have ended, although Smith+Nephew continues to evaluate strategic options for Orthopaedics.
Product Development and Regulatory Progress
Smith+Nephew received US Food and Drug Administration 510(k) clearance for its cementless LANDMARK Total Knee System and completed the first surgical procedures using the product.
The company also completed initial femoral procedures using its TESSA Spatial Surgery System and submitted an application for regulatory clearance covering tibial tunnel placement.
Management reported that products introduced within the past five years contributed more than half of the group’s third-quarter revenue growth.
Additional developments included new surgical instrument launches and continued investment in robotic surgery technology.
Revised Full-Year Financial Guidance
Smith+Nephew reduced several financial expectations for 2026 following its assessment of US Orthopaedics trading conditions.
Underlying revenue growth is now expected to reach approximately 3%, compared with the previous forecast of around 4%.
Trading profit growth is forecast at approximately 4%, down from 8%, with expected trading profit reduced to $1.25 billion from $1.3 billion.
Free cash flow guidance has been lowered to approximately $750 million from $800 million, while adjusted return on invested capital is now expected to be around 9%, compared with the previous target of more than 10%.
The company maintained its expectation for trading cash conversion of approximately 95%.
Share Buyback and Strategic Priorities
Smith+Nephew confirmed that $250 million of its previously announced $500 million share repurchase programme had been completed by the end of the third quarter.
The group continues to prioritise investment in Sports Medicine and Advanced Wound Management under its RISE strategy, alongside efforts to improve Orthopaedics performance.
Management expects slower growth in US hip and knee reconstruction to continue through the fourth quarter.
More About Smith+Nephew
Smith+Nephew Plc is a global medical technology company operating across Orthopaedics, Sports Medicine & ENT, and Advanced Wound Management. Its portfolio includes joint replacement implants, surgical robotics, sports medicine devices and wound treatment technologies.
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