Shares in medical device maker Smith & Nephew tumbled more than six per cent this morning after it cut its outlook for sales growth in a "disappointing" start to the year.
The artificial hip maker expects underlying revenue growth for the full year to be in the range of two to three per cent after sales in the first quarter were flat, Smith & Nephew said in a trading update for the three months to March.
Reported revenue rose five per cent to $1.2bn (£883m) though thanks to a foreign exchange tailwind, but that was still three per cent below analysts at Investec's forecast.
The company's "cautious" outlook comes as it noted a weaker performance from advanced wound bioactives in 2018.
In a note, Investec said the firm had a disappointing start to the year. "Whilst the first quarter was expected to be weak, due to one fewer sales day in the period vs the first quarter of 2017, sales came in at the lower end of the consensus range.
"Trauma and arthroscopic enabling technologies were weak (down two per cent and five per cent respectively). In wound care, bioactives were disappointing, down 12 per cent underlying which the company attributes to deepening seasonality in sales patterns," it said.
Smith & Nephew expects sales growth to be stronger in the second half of the year, and it forecasts its trading profit margin for the year will be at or above that achieved in 2017.
Shares were down 6.46 per cent at 1,310p in morning trading.
Chief executive Olivier Bohuon, who will pass the baton to newly appointed devices veteran Namal Nawana in May, said trading conditions are expected to return to "more normal levels". This, combined with the company's rollout of new products and growth in emerging markets, "gives us confidence in delivering an improving performance trend during the remainder of the year," he said.