The market noted the solid improvement in interim profit for hearing implants maker Cochlear (COH) in the six months to December, but also noted the board’s hesitation in restoring to the high level paid out a year earlier.
While Cochlear more than tripled its first half profit to $71.4 million, thanks to new product launches which boosted sales, directors declared an interim dividend of 90c a share, well under the $1.27 a share paid out for the same period of 2013 when the company’s sales and earnings were hit by delays to new product.
The latest profit compares more than favourable with the $21 million earned a year ago when sales suffered due to delays in regulatory approvals for new devices.
The improvement was forecast by the market, but the dividend was short of some estimates.
COH 2Y – Cochlear triples half year profit, but dividends down
Cochlear lifted sales revenue 17% to a record $438.3 million in the half, as new products released in 2013-14 sold strongly. As a result, the company said in yesterday’s statement it expected “ongoing steady progress” during the second half of the year.
The latest result was boosted by a provision taken in the previous year for a patent dispute, however on an underlying basis after tax profit was up a very strong 94%.
Earnings before interest and tax rose 103% to $100.5 million, topping market forecasts of $97.8 million.
Cochlear said sales of its implants, which included sound processor upgrades, totalled $383.0 million, up 16% on the prior year and up 14% in constant currency. Sales of sound processor upgrades of $82.2 million were up 98%.
The shares edged up 0.9% to $88.38. The 52% rise in the past year tells us the market has been expecting this result for a while.