- Due to the coronavirus outbreak, Cochlear (COH) expects a potential $30 million reduction its 2020 financial year earnings guidance
- Cochlear is an ASX 200-listed manufacturer of hearing devices such as Cochlear implants
- China is a top 5 market for the company but has unfortunately had to defer cochlear implant surgeries to limit the risk of the coronavirus spreading
- The company is remaining positive surgeries will progress once hospitals resume normal operations
- Cochlear is down 3.21 per cent with shares trading for $236.90 each
Due to the coronavirus outbreak, Cochlear (COH) has reduced its 2020 financial year earnings guidance from $290 – $300 million to $270 – $290 million.
Cochlear is a designer and manufacturer of medical devices for people with hearing impairments and disabilities.
Unfortunately across Greater China, hospitals are turning people away who require cochlear implants. These procedures are being deferred to limit the risk of infection from the coronavirus.
“It has become clear that the coronavirus will impact the number of cochlear implant surgeries in Greater China, a top 5 market for Cochlear,” Cochlear CEO and President Dig Howitt said.
“While we cannot predict how long surgeries will be delayed, the low end of guidance factors in a significant decline in sales for Greater China for the second half,” Dig added.
This isn’t the first time Cochlear has experienced something like this. During the Severe Acute Respiratory Syndrome (SARS) epidemic, the company experienced a material reduction in sales in China for three months.
“We are confident that many of the delayed surgeries will progress once hospitals resume normal operations,” Dig stated positively.
Cochlear also assumes there won’t be any material disruption to the supply chain, including the importation of components from China.
The medical device company has made a number of ear implants and devices for people with hearing impairments.
Luckily at this stage, Cochlear’s Chinese suppliers have at least three months inventory of most components needed for its devices. This means there is no reason to expect a supply disruption.
Despite the recent setback of the coronavirus outbreak, the company believes in the long-term potential of the China market.
“The Chinese cochlear implant market is important now and into the future and we remain committed to maintaining a leading position,” Dig commented.
Cochlear is down 3.21 per cent with shares trading for $236.90 each at 2:05 pm AEDT.