COH - Cochlear Limited

[Dona Ferentes]

Sales of Cochlear implant units bumped up 7 per cent to 18,598 units over the half, with the bulk of gains in emerging markets. In developed markets, hearing implant volumes slid by 2 per cent, though CEO Howitt pointed out volumes overall were tracking ahead of pre-COVID-19 levels despite variability across different countries.

Overall, total sales revenue jumped 10 per cent to $815 million, and Cochlear lifted the interim dividend by 35 per cent to $1.55 a share, representing a payout of 65 per cent of underlying net profit.

Services revenue grew strongly in the first half, with revenues up 21 per cent in constant currency terms to $256.5 million.

Cochlear boss Dig Howitt says spending big on raw materials and semiconductor inventory will allow the hearing implant maker to ride out future ructions in global supply chains, which have been squeezed as the fight for semiconductors rages.

“When COVID-19 hit, we needed to make sure we kept our customers on air,” Mr Howitt said in an interview. “We deliberately built up our inventories as a buffer to any shortages, but it’s also meant we have run the supply chain more efficiently which has helped us expand the gross margin.”

 

[Dona Ferentes]

The US Food and Drug Administration (FDA) on Tuesday adopted a final rule to create a new category of over-the-counter hearing aids that can be sold directly to millions of Americans. These will be available through drug stores and other chains from the middle of October.

An estimated 30 million plus Americans need hearing assistance at some level, according to industry groups.

The change isn’t sudden, it has been talked about for a year or more and in 2017, the US Congress passed legislation requiring the FDA to create a category of over-the-counter hearing aids, but it was not fully implemented.

Cochlear’s products are more advanced and are for people with severe hearing impairment. They are very different and far more complex than the products that will be sold in the US in stores and other outlets from October.

But the danger is that many people on the borderline will opt for the new products without medical checks to see if they are suitable which could drain some potential customers for Cochlear’s products.

 

[sptrawler]

The daughter has a cochlear, she has worn hearing aides all her life and now has to move on to a cochlear, as the report states it is focused on a different market than hearing aides. Thanks for the post @Dona Ferentes

 

[Dona Ferentes]

Cochlear’s acquisition of a Danish hearing loss device maker has been knocked back by the UK competition watchdog

 

[Dona Ferentes]

COH has been powering ahead and is likely to do so.

.
now a $22B company and an Aussie success.

 

[mullokintyre]

Cochlear’s acquisition of a Danish hearing loss device maker has been knocked back by the UK competition watchdog

Why would a takeover by an Australian listed company of Danish Hearing loss company be knocked back by a UK competition watch dog?
What sort of jurisdiction do they have??
Mick

 

[Dona Ferentes]

Why would a takeover by an Australian listed company of Danish Hearing loss company be knocked back by a UK competition watch dog?
What sort of jurisdiction do they have??
Mick

multinationals ... operating in multiple markets / jurisdictions...

sometimes , a solution is to sell off the offending bit, but this may not be feasible.

 

[Dona Ferentes]

COH has been powering ahead and is likely to do so.... ..now a $22B company and an Aussie success.

AND, what is Cochlear doing with its extra profits? It increased its interim dividend to $2, up 29 per cent on last year, paying out 68 per cent of underlying profit.

Cochlear had planned to get cash levels down further with around $200 million via on-market share buybacks over a number of years. Net cash was at $485 million at December 31, and the buyback was paused.

Why? The “current high interest rate environment”, Cochlear told investors.. When asked to explain it, CEO Howitt said the cash was better left sitting in a bank account earning interest than buying back the company’s shares. It was better for accretion, he said.

Surely, it also has something to do with Cochlear’s share price. The stock has traded above $300 for most of this year, having previously struggled to break the $250 barrier. Cochlear’s buyback didn’t pay more than $285 a share. And with the stock at about $333 on Monday, it has been “paused".

 

[Dona Ferentes]

down nearly 10 per cent when the results landed, but two days later ...
-will the up-trend continue?
-and will there be a stock split?

 

[Dona Ferentes]

down nearly 10 per cent when the results landed, but two days later ...
-will the up-trend continue?
-and will there be a stock split?

a bit of an exaggeration ... make that $10 price movement each way, or 3%.

 

[Dona Ferentes]

Moderna is trialling a potential vaccine against Cytomegalovirus (CMV), which is the most common infectious cause of birth defects in the United States and can cause newborn hearing loss. It is in phase three trials and Moderna said this week it should have results later this year.

If the vaccine is effective and uptake is high, an analyst1 says there could be a reduction in the paediatric cochlear implant market, which makes it sound a bit like Cochlear’s potential Ozempic moment.

How material could that be for Cochlear?

Well, if you assume the vaccine was launched in the 2026 financial year, took two years to roll out and saw a 20 per cent reduction in newborns with hearing impairment, an analyst says it could cut Cochlear’s paediatric volumes by about 5 per cent.

 

[mullokintyre]

Moderna is trialling a potential vaccine against Cytomegalovirus (CMV), which is the most common infectious cause of birth defects in the United States and can cause newborn hearing loss. It is in phase three trials and Moderna said this week it should have results later this year.

If the vaccine is effective and uptake is high, an analyst1 says there could be a reduction in the paediatric cochlear implant market, which makes it sound a bit like Cochlear’s potential Ozempic moment.

How material could that be for Cochlear?

Well, if you assume the vaccine was launched in the 2026 financial year, took two years to roll out and saw a 20 per cent reduction in newborns with hearing impairment, an analyst says it could cut Cochlear’s paediatric volumes by about 5 per cent.

been mulling over COH for a while as a long term hold.
Results out today were not greeted well by the market with SP down 8%.
Revenue missed consensus, and profits were down due to higher taxes.
Not sure if that warranted an 8% fall.Still looking.
Mick