Cochlear takes big coronavirus hit, shares plunge

Bionic ear manufacturer Cochlear has been forced to abandon its profit predictions for the year because of mass postponements of implant surgeries in the United States and Europe.

The Sydney company told investors this morning it was withdrawing its earnings guidance due to ‘short-term negative impacts.’

China’s health response to the virus is not at issue here – the country is one of Cochlear’s biggest markets, and the company reports a small but growing number of surgeries taking place in recent weeks.

Cochlear CEO Dig Howitt said the company was seeing a growing number of heath authorities recommend or enforce surgery deferrals.

“We expect these actions to impact surgeries in our major markets, particularly the US and Western Europe.

“We expect to experience a significant decline in sales in the immediate future.”

Cochlear shares had plunged 18 per cent on the news to $177.03 by 11.30 am eastern time.

The company is not reducing staff levels, envisaging only a temporary interruption in sales, however it is freezing all non-essential spending and capital expenditure until June 30 and freezing all hirings.

Howitt declined to give any earnings estimate for the rest of the year.

Howitt said: “The business continues to carry at least three months of inventory of most components and is managing distribution carefully to enable continued supply of products to customers.”

Main picture: Cochlear

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