Cochlear shares have fallen more than five per cent 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 to $250 million.
Sales revenue rose nine per cent to $1.35 billion.
Cochlear sold 35,260 hearing implants in 2017/18, up eight per cent from a year earlier, taking the all-time volumes to 550,000.
IG market analyst Kyle Rodda said Cochlear’s net income is 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 so far this 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 told AAP.
At 1420 AEST, Cochlear shares were down $9.16 or 4.6 per cent, to $189.62, dragging the entire health care sector index lower.
Cochlear has forecast 2018/19 net profit to be between eight and 12 per cent higher in a range of $265 million to $275 million.
Chief executive Dig Howitt 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 key markets including the US, Western Europe and Australia, and is “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, Middle East and Africa delivered a 12 per cent boost to sales revenue at $478.9 million, while Asia-Pacific posted a four per cent rise to $224 million.
PROFIT, DIVIDEND JUMPS
*Net profit up 10pcts to $245.8 million
*Sales revenue up 9pct to $1.35 billion
*Final dividend $1.60, fully franked, up from $1.40 a year earlier