Market turns down the volume on Cochlear (ASX: COH)
Stock
Cochlear (ASX: COH) $194.41 as at 18/02/2019
Event
In a similar vain to the result from CSL (ASX: CSL) last week, Cochlear has shown significant growth for the first half the year to meet consensus numbers, but fell short on guidance for the year which has led to the stock trading lower this morning.
Profit for the half was up 16% to $128.6m, just edging out the consensus at $127m, while revenue landed just shy at $711.9m vs $713.5m from the analysts.
For the full year, Cochlear maintained guidance of $265m-$275m profit being 8-12% growth on FY18. The market has run ahead of these numbers, with consensus sitting at the top end of the range at $272m.
Part of the issue with guidance wasn’t just the numbers given. One key consideration from the company is “a lower rate of cochlear implant growth across the developed markets for FY19.” Although the company clearly has a large untapped market, competitors are encroaching in on the space and the low hanging fruit seems to be have taken.
The half year was also supported by a lower R&D expense that seemed to prop up profits, lowering the quality of the result.
Cochlear (ASX: COH) Chart
Market Matters Take/Outlook
