Smith & Nephew's Profits Dip, But Firm's Emerging-Marketing Strategy Paying Off

Smith & Nephew released mixed earnings for its second quarter, landing sales of $1.07 billion, a 4.4% year-over-year increase. However, profits at the company were down 56%. Facing this unsteady financial reality, the future holds a series of new adventures for the medtech giant.

Armed with $1.5 billion, Smith & Nephew plans to undergo a series of new acquisitions in both the sports medicine, trauma and wound-care fields. In addition, the company is edging to purchase new manufacturers in emerging markets. BRIC countries stand out as strong contenders. In an effort to meet the modest budgets of patients in emerging nations, the company will introduce mid-tier wound products later this year.

"The on-going implementation of our Strategic Priorities underpinned our performance in the quarter. We generated stand-out contributions from our areas of focused investment in the Emerging and International Markets and Negative Pressure Wound Therapy," stated CEO Olivier Bohuon.

In part, the company is hoping to reduce its heavy reliance on orthopedics. With the current sluggish economy, fewer people are getting hip and knee implants. While the market for premium products is still strong, the company believes that growth will be stronger for mid-tier products.

India-based Adler Mediequip Private Ltd. will serve as the company's central headquarters for developing mid-tier wound and trauma-care products in emerging nations. The company announced the acquisitions of Adler and Sushrut Surgicals Private Ltd. in May of this year.