Cochlear shares the pain on profit
COCHLEAR shares have posted their biggest plunge in more than two years after its fiscal 2015 net profit missed analysts’ expectations, despite a lower Australian dollar buoying sales revenues.
The global biotech posted a net profit of $145.8 million for the year to June 30, representing an increase of 56 per cent on the prior year.
But the figure fell short of analysts’ expectations, with an average forecast of $156.9 million and one even as high as $160.8 million.
The group’s profit projections for the coming year also fell short of estimates, with the company targeting an aftertax net profit of up to $175 million against analyst forecasts of $180 million.
Cochlear shares closed down 7.2 per cent at $83.56, wiping about $350 million from its market capitalisation.
The stock had dropped 14 per cent to $76.73 in early trade, its biggest intraday fall since June 2013.
However, it wasn’t all bad news. Cochlear’s sales revenue slightly beat expectations, lifting 15 per cent to $941.9 million. The average analyst forecast was for an increase of 14 per cent to $937 million.
Sales were buoyed by a lower Australian dollar, which benefited foreign sales by $32.7 million when translated into the local currency.
The firm’s earnings before interest, tax, depreciation and amortisation rose to $236.7 million, against an analyst expectation of $247 million.
In his final report to Cochlear shareholders before he leaves after more than a decade at the helm, chief executive Chris Roberts said the company’s implant unit growth was stronger in devel- oped countries, with 7 per cent growth in western Europe and 15 per cent in North America, but was offset by weaker tender sales in developing countries.
Dr Roberts said Cochlear had a successful year as it continued to roll out new products and expand in different markets, including online.
Customer reaction to its products – including the wireless devices it began rolling out in February – had been very positive, he said.
The rollout and upgrades to other products would help drive sales in 2016.
The new wireless devices allow people with hearing difficulty to stream a high-quality digital sound from a phone, bluetooth device, mini-microphone or television directly to a sound processor.
“This is truly a game-changer in terms of the ease of use and the quality of sound for very, very difficult listening environments,” Dr Roberts said.
He will be replaced by Chris Smith, who takes the role next month.
Cochlear said it would pay a final fully franked dividend of $1, bringing the year’s total distribution to $1.90, down 25 per cent on the year before. THE AUSTRALIAN