July 29, 2020, 2:23 a.m. EDT

Smith & Nephew swings to loss over virus hit

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By Adria Calatayud

Smith & Nephew PLC said Wednesday that it swung to a pretax loss for the first half of the year, and that trading profit missed consensus expectations as the coronavirus pandemic hurt its margin.

Pretax loss for the six months to June 27 was $34 million compared with a profit of $383 million in the year-earlier period, the U.K. medical-technology company said. Revenue fell 18% to $2.04 billion, Smith & Nephew said.

First-half trading profit--the company's preferred metric, which strips out exceptional and other one-off items--fell to $172 million from $532 million for the year-earlier period, with a margin of 8.5%. Analysts expected a trading profit of $225 million with a margin of 11.0%, according to consensus estimates provided by the company.

The company said it delivered cost savings of $150 million for the first half, out of a total program for the year of $200 million.

Smith & Nephew said its guidance for 2020 remains withdrawn due to uncertainty, but that it is encouraged by an improved performance dynamic across the second quarter.

The board maintained its interim dividend unchanged at 14.4 cents a share.

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