Sonova Holding AG (SIX:SOON) saw shares plummet as it cut its fiscal year guidance after releasing disappointing 2nd quarter earnings related to weak cochlear implant sales.
Guidance for sales for the year dropped from 7-9% to 6-8% and earnings before interest, taxes and amoritisation were dropped significantly from 9-13% to 3-7%.
Shares have dropped roughly 8%, closing at $122.51 (CHF 123.70), their lowest in approximately 2 months.
Sonova reported dipping sales of $995 million for the 1st half of 2015, up 1.3% from 2014.
The company reported adjusted earnings of $155 million (CHF 157.3 million), down from last year’s $172 million (CHF 173.6 million) and off from analysts expectations of $171 million (CHF 173 million).
Lower sales to the U.S. Department of Veterans Affairs, the largest U.S. hearing aid buyer, were held partially responsible for the lower sales.
In addition, a decline in foreign currencies impacted the drooping numbers, according to the company.
“We report a continued solid performance in our hearing instruments business and again achieved a strong operating free cash flow for the first half. Our cochlear implants segment did not fully meet our original expectations but we are encouraged by an improved momentum towards the end of the reporting period. In addition, our reported results were affected by significant negative currency effects. We are thus adjusting our full year outlook mainly to reflect the performance of our CI business in the first half and the impact of currency losses. Despite these challenges, we remain confident to achieve solid earnings growth in the second half of the year and going forward,” CEO Lukas Braunschweiler said in a press release.
Material from Reuters was used in this report.