Cochlear investors hear siren call of higher profits

afr.com:

Hearing device maker Cochlear aims to boost margins and revenues this year, amid plans to boost market penetration for its products.

Wielding new studies about the effectiveness of hearing aids assisting people with a higher risk of cognitive decline, on Tuesday Cochlear argued it would try to grow the overall customer base this year rather than take market share.

Cochlear’s manufacturing laboratory. The company is predicting higher profits.  Louie Douvis

The Sydney-based device company tipped profits on its preferred underlying basis would rise between $355 million and $375 million for this year. That followed a 10 per cent increase in earnings to $305.2 million for the year to June and a final dividend payout of $1.75.

Cochlear says it has implanted more than 750,000 devices in patients across the globe, and also makes money from sound processor upgrades and bone conduction systems.

Its key Cochlear device, which can be covered by governments or private insurers, can cost more than $32,000 with surgery, according to the federal government.

The company said trading conditions for its main implants and services were strong while growth rates for some acoustic devices might be lower.

The upgraded guidance helped push shares up $12.87, or more than 5 per cent, to $246.08 in Tuesday’s trading.

Barrenjoey’s head of healthcare Saul Hadassin described the result as strong and led by sales across product segments and regions.

This had enabled more research and development investment, “which should support them in maintaining their competitive edge over other industry participants”, he said.

Cochlear’s result for the past 12 months included sales revenues increasing 19 per cent to $1.955 billion, with Cochlear chief executive