Cochlear tones down earnings expectations
Hearing implant maker Cochlear expects profit to be flat this financial year as its operating margin comes under pressure.
The company will receive less revenue from foreign exchange hedges in the 2013-14 financial year, and will maintain its spending on research and development, chairman Rick Holliday-Smith says.
"These decisions mean there is some pressure in the short term on the operating margin," he told shareholders at the company's annual meeting in Sydney.
Net profit in 2013-14 was expected to be similar to the previous year's $132.6 million, with most to be made in the second half of the year, he said.
Cochlear's interim dividend is expected to be $1.27 a share, compared with $1.25 in the previous corresponding period, Mr Holliday-Smith said.
The final dividend is also expected to be $1.27, in line with the previous corresponding period.
Cochlear shares closed the session on Tuesday down $1.15, or 1.9 per cent, at $58.76.
Cochlear's 2012-13 annual profit was a lot higher than the previous year's, when Cochlear was hit by costs from a recall of the CI500 series implant.
Chief executive Chris Roberts said Cochlear had invested heavily in research and development of new products over the past five years, and those products would start appearing in earnest in 2013-14. "There's more going out this year than in any other year ever," Dr Roberts said.
"Fiscal 2014 is a year of significant activity that is really going to set the company up for growing momentum in the second half of fiscal 2014, going into fiscal 2015," he added.
Cochlear has just begun promotion of its Nucleus 6 sound processor, which the company says is the most advanced and smallest sound processor on the market.
It also expects its emerging range of acoustic implants to make progress in the 2013-14 financial year, following initial sales in 2012-13.