Cochlear, the hearing implant maker, has underlined its confidence in the outlook by boosting interim dividend 8% despite what appeared to be a flat half-year profit.
Net profit in the six months ended December 31 fell 1% to $110.8 million as revenue rose 7% to $649.6 million. But it was actually higher after a couple of one offs were stripped out.
The news saw the shares sold down in the usual knee jerk initial over reaction to what seems to be good news.
That saw the shares slide to a day’s low of $169.54, before the adults appeared on the scene and pushed the shares back up to $171.74, down 5 cents on the day. Cochlear said the result would have been up 1% at constant currencies – the Australian dollar rose in the half as the US currency was sold off.
Cochlear said the bottom line and about 5% higher without a $5.5 million charge to profits attributable to the impact of the US company tax cut reducing the value of deferred tax assets.
Cochlear said it would pay a $1.40 a share interim dividend, up from $1.30 in the year-earlier period.
More importantly, it reaffirmed full year profit guidance of $240 million-$250 million, an increase of between 7% and 12% on last year’s net profit, and said sales of its new iPhone compatible sound processor, the Nucleus 7, started well after being launched half way through the period.
"Positive momentum continues across the developed markets with the significant investments made in product development and market growth initiatives over the previous few years expected to underpin growth in full year 2018," said chief executive Dig Howitt.
Cochlear sold 15,972 implant units in the six months to December, down 2% from a year earlier, due to changes in the timing of some tenders in China.
The company fulfilled a Chinese central government tender for 1,100 units in the first half of the 2016/17 financial year, and will begin shipping 1,491 China tender units awarded in October 2017 in the second half of the current financial year.
Excluding those changes, unit sales rose 5%. Cochlear said a highlight of its first-half results was a 12% lift in unit sales in developed markets, which includes the US.
