Earnings for Australia’s Cochlear Ltd. down sharply

Market

Australia’s Cochlear Ltd. has reported a 29% fall in annual net profit. The company is still waiting for approval from the US Food and Drug Administration (FDA) to allow sale of the full feature set of the Nucleus 6 device.

Cochlear Ltd., the world’s largest supplier of hearing implants, which has about two-thirds of the global market, posted a net profit of AUD 93.7 million for the year through June, at the lower end of the company’s forecast (91 to 101 million) and below average financial analysts’ forecasts. Annual revenue was however up 7% to AUD 804.9 million, despite cochlear implant sales falling 3% to just below 26,000 units. This was thanks to the release of new sound processors and hybrid hearing aids. In contrast, costs were significantly higher.

The Americas account for nearly half of Cochlear’s annual sales, making the launch of the Nucleus 6 device in the US particularly important. Regulators there are still undecided about some of the features of the product, such as wireless connectivity. Nucleus 6 is smaller than previous models and has features including the ability to adjust automatically to surrounding noise.

While the regulatory process in the US continues, competitor companies such as Switzerland’s Sonova Holding have been able to launch rival products and increase their market share. Sonova Advanced Bionics released its latest generation implant in August, enabling the company to report a 55% jump in sales growth.

Cochlear Ltd. has had some trouble in restoring confidence since its 2011 recall of an earlier generation implant that had a water leakage defect that sometimes caused it to fail.

Source: The Australian.

C.S.