Cochlear Shares Plunge 10% on Friday, Here's Why.

2 min read | February 14, 2025 11:40 AM AEDT | By Team Kalkine Media

Cochlear Shares Plunge 10% on Friday, Here's Why. — Image source: Shutterstock

Steady Revenue Growth but Mixed Segment Performance

For the six months ending December 31, Cochlear posted a 5% increase in sales revenue to $1.17 billion, with underlying net profit rising 7% to $206 million.

The company’s growth was driven by its Cochlear Implant and Acoustics segments, while weakness in the Services business weighed on overall performance:

Cochlear Implant revenue grew 12% to $724.5 million, with unit sales up 5%. The adult and senior segments were the key drivers, particularly in the US and Asia-Pacific, though demand for children declined slightly after a prior year.
Acoustics revenue surged 21% to $140.4 million, fueled by increased adoption of the Cochlear Osia implant, particularly in the US and new markets like France and Italy.
Services revenue declined 13% to $305 million, reflecting lower upgrade rates and financial pressures in the US limiting patient spending on new technology.

Guidance Disappoints Market Expectations

The biggest factor behind today’s share price drop is Cochlear’s weaker-than-expected profit outlook. The company now expects its full-year net profit to be at the lower end of its $410 million to $430 million range, citing reduced Services revenue and increased investments in cloud infrastructure.

This projection fell short of analyst expectations, leading to investor concerns over slower earnings growth in the near term.

Investor Reaction and Outlook

Despite a higher interim dividend of $2.15 per share (up 8%), the market’s focus has been on the weaker guidance.

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