Cochlear shares have dropped to a three-year low after the hearing implant company delivered weaker-than-expected earnings after its next-generation implant took longer to roll out than anticipated.
Cochlear's statutory net profit for the half-year to December 31 was down 21 per cent to $161.5 million.
Net profit excluding one-off items fell 10 per cent to $194.8 million, beneath consensus expectations of $202 million in underlying profit.
Cochlear had $1.18 billion in sales during the half, down two per cent from a year ago after excluding the impact of currency fluctuations.
The Nucleus Nexa system, the only cochlear implant with upgradeable firmware, launched behind schedule in June but was receiving a positive reception from professionals and recipients.
"Overall, we saw a very successful launch, which sets us up for the future," chief executive and president Dig Howitt told analysts on Friday.
Product registration and contract renewals for the new system took longer than anticipated, but Cochlear had negotiated increased prices for the new system, he said.
Cochlear now expects full-year profit to come in at the lower end of its August guidance of $435 million to $460 million.
Cochlear said gross margins had decreased due to a higher mix of sales from emerging markets, particularly in China.
Cochlear will pay an interim dividend of $2.15 per share, the same payout as a year ago. The dividend will be 85 per cent franked, up from 80 per cent a year ago.
RBC Capital Markets analyst Craig Wong-Pan said the result was weaker than consensus expectations and RBC's forecasts.
"We expect the stock to be weaker today given the soft 1H performance and management lowering full year expectations," Mr Wong-Pan wrote.
In early trading, Cochlear shares had dropped 12.4 per cent to a three-year low of $215.11.
