Cochlear shares plunge, flags annual earnings at lower end of outlook (updated)

Cochlear

13/02/2026 01:23

Shares plunge 17%, worst session since March 2020

Expects FY underlying earnings at lower end of range

1H26 underlying profit misses estimates

Warns stronger Australian dollar could further erode profits

Updates with details from paragraph 5 onwards

By Kumar Tanishk and Nikita Maria Jino

Feb 13 (Reuters) - Australia's Cochlear COH.AX guided full-year earnings towards the lower end of its forecast range after reporting weaker-than-expected first-half earnings on Friday, sending its shares crashing 17% in its worst session in nearly six years.

The hearing implants maker projected full-year underlying net profit at the lower end of its forecast range of A$435 million ($308.33 million) to A$460 million, citing delays in the contracting process for its Nexa Implant system.

The outlook falls short of the Visible Alpha consensus of A$452.7 million.

Cochlear's first-half underlying earnings also slipped 9% to A$194.8 million, missing market expectations of A$202 million.

Shares of the company, one of the most expensive stocks in Australia, tumbled as much as 17.5% to A$202.60, the lowest since late January 2023, and marking their worst one-session drop since mid-March 2020.

"We expect the market will be disappointed given the slower uptake of the recently launched Nexa unit," said Saul Hadassin, head of healthcare research at Barrenjoey, citing prior weakness in the stock.

The company launched the Cochlear Nucleus Nexa System in June 2025 as the first smart implant system with upgradeable firmware, but faced delays in product registration and contract renewals, the company said.

Sales revenue was flat from last year at A$1.18 billion, with gross margins contracting by two percentage points to 73% due to increased contributions from its lower-margin business in emerging markets.

Another factor that could be a drag on earnings is a sustained appreciation in the Australian dollar AUD=D3, which earlier this week hit a three-year peak of $0.7146 on hawkish signals from the central bank.

Cochlear earns over 90% of revenue in foreign currencies. If the Australian dollar remained at its current levels through to June, it could further reduce its full-year underlying earnings by A$30 million, the Sydney-based medical devices maker said.

Analysts at Citi noted that even without currency pressures, the first-half results implied consensus would be asking for 33% growth in underlying profit for the second half, which seems "unrealistic".

Cochlear declared an interim dividend of A$2.15 per share, unchanged from last year.

($1 = 1.4108 Australian dollars)

 (Reporting by Kumar Tanishk and Nikita Maria Jino in Bengaluru; Editing by Alan Barona)

 ((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk))