REPORTING SEASON: Cochlear Ltd (COH)

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Figure 1: Cochlear Ltd 12 month chart

 

The world’s largest hearing implant maker Cochlear Limited (COH) has missed market expectations with its first half profit, due to the staggered launch of its newest stgice, which had been seen as a key stepping stone in rebuilding the company’s profit and reputation.

Profit for the six months to December 31 2013 came in at $21 million, down 73% from the prior corresponding period and well below expectations.

Total revenue fell 5% to $371 million while earnings fell 54% to $49 million.

COH’s latest stgice, the Nucleus 6, which allows users to connect wirelessly to smartphones, received regulatory approval in Europe and the US last year, however not all of the product’s features were approved impacting the release of the stgice in key markets.

The Americas account for 40% of total COH sales and the company had already suffered setbacks there in recent years due to the recall of its CI-500 implant in 2011.

COH is also continuing to face competition from rival companies.

COH today downgraded its full year guidance and said it’s unlikely to match last year’s $132.6 million profit.

It now expects a 2H profit between $70-80 million which analysts believe could be a stretch.

Shareholders will receive an interim dividend of $1.27 per share, 30% franked, to be paid on the 27th March.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliette Saly, Market Analyst,