By Aaditya GovindRao
(Reuters) – Cochlear shares were on track for their worst session in five years on Friday, after the Australian hearing implants maker reported first-half profit below estimates and forecast annual earnings at the lower end of its previous range.
The stock, one of the priciest on the benchmark index until Thursday’s close, sank as much as 13.5% and looked set to post its biggest single-day drop since March 16, 2020. It was among the top losers on the S&P/ASX 200 index, which was up 0.4%, as of 0051 GMT.
Sydney-based Cochlear said it now expects its fiscal 2025 underlying profit to be at the lower end of the $410 million to $430 million range forecast in August, citing lower contribution from its services segment.
The company also predicts a single-digit decline in full-year services revenue, compared with its previous expectation of a modest growth. The services segment accounts for about 26% of the company’s total revenue.
“In the U.S., cost of living pressures have been a factor delaying the replacement of ageing sound processing technology, as many recipients incur out-of-pocket expenses to fund their new sound processors,” the company said in a statement.
Cochlear’s underlying net profit came in at $205.5 million for the first half of the year, missing a Visible Alpha consensus estimate of $209.3 million, according to investment adviser Jarden.
Revenue from the services segment, which offers sound processor upgrades for hearing implants, declined 13%, hurt by a slow uptake of Cochlear’s latest “Nucleus 8” sound processor.
“New expectations for being at the lower end of profit guidance could be cause for concern or it could just be a blip if services revenue in fiscal 2026 can pick up again with new product launches,” analysts at UBS said in a note.
(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Subhranshu Sahu)
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