April 22 (Reuters) – Cochlear shares crashed nearly 41% on Wednesday in a record daily fall, after the Australian hearing implants maker slashed its forecast for annual earnings, citing weak trading conditions and uncertainty stoked by the Middle East war.
The downgrade adds to a string of profit warnings issued by antipodean firms as the fallout from the Middle East war ripples through supply chains, fuelling inflation, dampening consumer confidence and reshaping corporate spending and earnings.
Cochlear now expects underlying net profit in the range of A$290 million to A$330 million ($207.61 million-$236.25 million) for fiscal year 2026, sharply lower than the A$435 million to A$460 million previously expected.
The midpoint of the new range also misses the Visible Alpha consensus estimate of A$402.5 million by a wide margin.
Shares of Cochlear, once the priciest on the Australian stock exchange, lost 40.7% to end the session at A$99.58, their weakest closing point since March 2016.
Cochlear said demand in developed markets has softened since January due to hospital capacity limits, weaker referrals, and worsening consumer sentiment, especially in the United States, dampening discretionary healthcare decisions and near‑term surgical volumes.
“Tough times for developed world insurers translate to volume delays, at the very least, the question for us and the market is whether the issues outlined today are structural,” Jefferies analysts said in a note.
“Our recent discussions with U.S. Cochlear implant clinics highlight that public and private health insurers are under increasing pressure, leading to volume delays for providers.”
In emerging markets, demand remained solid, but the conflict in the Middle East is expected to result in order cancellations and risk delaying deliveries to some countries, Cochlear said.
Second‑half sales growth is seen at 2%–6% on a constant currency basis amid softness in developed markets and Middle East uncertainties.
The company flagged potential receivables provisioning of up to A$10 million for the year and an impact of about A$25 million in the second half due to a stronger Australian dollar.
($1 = 1.3968 Australian dollars)
(Reporting by Kumar Tanishk and Sameer Manekar in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
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