Bionic-ear implant company Cochlear has reported a first-half net profit of $75.25 million, up 8 per cent on the previous corresponding period, as sales dipped slightly on currency exchange rate movements.
Revenue for the first half of 2009-10 fell 2 per cent to $347.6 million.
Sales, excluding foreign exchange contracts, were down 3 per cent to $336.9 million.
In early trading, cochlear shares rose as much as $1.81, or 3 per cent, to $63.20.
The company said this morning that the sale of individual cochlear implant units rose 7 per cent to 9811 although installed base sales (sound processor upgrades) actually fell 29 per cent as the focus of its new next generation Nucleus 5 technology was on complete system sales, not upgrades.
Late last year Cochlear said recent US approval for its Nucleus 5 device, after approval in Europe, had resulted in 1000 devices being fitted in the northern hemisphere. It expected more as the US and Europe ended summer holidays.
Cochlear has not provided earnings guidance for 2009-10 but said profits from the launch of new implant and sound processor technologies would be weighted towards Cochlear's second half.
And it did not provide any comment on growing speculation that the company would be a bidder for Seimens hearing aid business.
UBS healthcare analyst Andrew Goodsall said the company's performance in the European Union was the "big disappointment" of the result with sales up only 1 per cent.
Mr Goodsall said this reflected delays in tenders and overshadowed the successful launch of Nucleus 5 in the region.
"FY10 net profit guidance is more than 15 per cent (and) implies lower single digit upgrades.
''We assume this reflects second half bullishness by Cochlear with unit sales up 20 per cent in the second quarter in markets where Nucleus 5 (was) launched."
Sales of its Baha implant technology was $46.4 million for the first half, up 10 per cent in constant currency terms and 1 per cent in reported currency.
The company said this morning cash from operating activities was up 42 per cent to a record $85.4 million and free cash flow of $89 million was up 149 per cent.
Cochlear has declared an interim dividend of 95 cents per share, against the interim dividend last year of 80 cents.
egreenblat@theage.com.au
