Cochlear shares suffered a dramatic decline on Wednesday, falling almost 41 per cent to a decade-low after the hearing implant pioneer issued its second earnings guidance downgrade in just over two months.
Earnings guidance slashed
The NSW-based company had advised in mid-February that underlying net profit for 2025-26 would be at the lower end of the $435-460 million range it forecast in August. That earlier downgrade was attributed to a longer-than-expected contracting process for its Nexa system, which Cochlear describes as the world's first and only smart implant, offering both upgradeable firmware and internal memory.
On Wednesday, Cochlear further reduced its guidance to $290-330 million, stating that total sales in developed markets had been softer than anticipated since January.
US consumer sentiment and policy impact
Consumer sentiment in the United States has plunged to historic lows, partly due to the Trump administration's cuts to Medicaid funding under its One Big Beautiful Bill Act. Chief executive Dig Howitt noted, "Addressing hearing loss in adults and seniors continues to be treated as a discretionary intervention, highlighting the importance of our strategy to medicalise hearing loss so that treatment is recognised as an important health priority."
Additional challenges
Cochlear is also lowering its production plan, citing the Middle East conflict which could leave it with millions in doubtful debts, and the strong Australian dollar which is having a negative foreign exchange impact.
The company's share price plunged 40.7 per cent to $99.58, compared to its 12-month high of $319.56 and around $343 in early 2024.
