Cochlear expects coronavirus to cut profit
Cochlear has downgraded its full-year profit guidance, saying the Wuhan coronavirus has cut demand for hearing implant surgery.
Cochlear now expects to earn $270 million to $290 million in 2019/20 - up two to nine per cent from what it made in 2018/19 - but down from the $290 million to $300 million in underlying net profit previously forecast.
Hospitals across Greater China, including Hong Kong and Taiwan, are deferring surgeries to limit the risk of infection from the epidemic, Cochlear said.
"It has become clear that the coronavirus will impact the number of cochlear implant surgeries in Greater China, a top five market for Cochlear," said company chief executive and president Dig Howitt said.
"During the SARS epidemic, Cochlear experienced a material reduction in China over a three-month period, followed by an uplift as the backlog of delayed surgeries cleared.
"We are confident that many of the delayed surgeries will progress once hospitals resume normal operation."
Coclear said it was assuming that there was no impact on sales outside of Greater China, and that the epidemic doesn't disrupt its supply chain.
The company relies on sound processors and accessories made in China, but has three months of inventory of most components and expects its Chinese suppliers to resume production soon.
Cochlear shares were down 4.0 per cent to a two-week low of $233.11 at 1044 AEDT.
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