BUSINESS Cochlear’s profit wavers

COCHLEAR shares were hard hit yesterday after the hearing implant maker delivered a weaker- than- expected 10 per cent rise in annual net profit.

Net profit for the 12 months to June 30 rose to $ 245.8 million – in the middle of the group’s guidance range of $ 240 million to $ 250 million.

Sales revenue rose 9 per cent to $ 1.35 billion.

Cochlear sold 35,260 hearing implants in 2017- 18, up 8 per cent from a year earlier, taking the all- time volumes to 550,000.

IG market analyst Kyle Rodda said Cochlear’s net income was slightly at the lower end of estimates, “cooling some of the enthusiasm for the stock”.

Ahead of the results, Cochlear shares had risen 16 per cent for the year, but with no buy recommendations on the stock from a pool of 15 analysts, “price growth may be limited in the year ahead”, Mr Rodda said.

Cochlear has forecast 2018- 19 net profit to be between 8 per cent and 12 per cent higher in a range of $ 265 million to $ 275 million.

Chief executive Dig Howitt ( pictured) expects growth to continue across the business, driven by “significant investments” in product development and market growth initiatives in the previous few years.

Cochlear also has several large long- term investment projects planned, including the development of a China manufacturing plant – expected to be built by the end of 2019- 20 – and boosting technology, he said.

The group’s Nucleus 7 sound processor – the world’s first made- for- iPhone implant sound processor – was launched during the second quarter across several key markets including the US, Western Europe and Australia, and was “performing well” in its first nine months, Mr Howitt said.

The Nucleus app for Android smartphones was released in June, allowing users with a compatible device to control their hearing from the phone.

Annual sales revenue rose 9 per cent to $ 648.5 million across the US, Canada and Latin America, which account for nearly half of total group sales revenue.

Its operations across Europe, the Middle East and Africa delivered a 12 per cent boost to sales revenue at $ 478.9 million, while Asia- Pacific posted a 4 per cent rise to come in at $ 224 million.

The final dividend was $ 1.60, fully franked, up from $ 1.40 a year earlier.