Smith & Nephew, a leading player in the medical equipment sector, has reported stronger-than-expected quarterly sales in its largest division, orthopaedics. This positive performance comes amid concerns about potential financial repercussions from an ongoing tariff conflict, which could result in a $20 million impact.

For the first quarter, the FTSE 100 company announced revenue of $1.4 billion, reflecting a 3.1 percent increase on an underlying basis, surpassing market predictions.

The growth in the orthopaedics segment was particularly notable, with a rise of 3.2 percent attributed to improved performance in hip and knee implants in the United States.

Renewed focus has been placed on Smith & Nephew’s orthopaedics performance after activist investor Cevian Capital acquired a stake in the company last July. This investment has sparked discussions regarding the potential for breaking up one of London’s longest-standing publicly traded companies.

Although the company is committed to enhancing its largest division, it has indicated that it may explore various options if growth in the U.S. orthopaedic reconstruction market does not show sustainable improvement or fails to drive share price increases.

The reassuring update on trading has contributed to a 5.8 percent rise in Smith & Nephew’s shares, bringing the price up by 58p to £10.54 on the London Stock Exchange.

Tracing its origins back to a pharmacy established in Kingston upon Hull in 1856, Smith & Nephew has grown to become one of the globe’s largest medical equipment firms, also engaging in wound care and sports medicine.

The company employs approximately 17,000 individuals across over 100 countries and is in the process of establishing a new research and development as well as manufacturing facility in Hull.

The chairman of the company is Rupert Soames, who is also the chairman of the CBI, a prominent business lobbying organization in the UK.

Deepak Nath, the chief executive of Smith & Nephew, expressed confidence in the company’s prospects despite existing uncertainties regarding tariffs. He stated, “We remain optimistic about achieving another year of robust revenue growth and a significant improvement in our trading profit margin.”

The firm reiterated its full-year guidance, projecting an underlying revenue growth of around 5 percent and a trading profit margin expansion to between 19 percent and 20 percent.

This positive outlook remains steady despite anticipations of a net impact from tariffs ranging between $15 million and $20 million for the year due to announced actions and mitigations.

In April, President Trump introduced extensive tariffs affecting global trading partners, leading to corresponding retaliatory measures from China.

A substantial portion of Smith & Nephew’s revenue—more than 50 percent—comes from the United States, where two-thirds of the products they sell are manufactured domestically. The company also operates manufacturing facilities in the UK, Costa Rica, Malaysia, China, and Switzerland.

“We are actively working to address the impacts of tariffs on imported products and raw materials for the U.S., utilizing our global manufacturing network to optimize our sourcing and supply routes,” the company noted.