March 16, 2020 / 12:29 AM / 3 months ago

UPDATE 1-Australia's Cochlear scraps FY earns forecast as coronavirus delays surgeries

(Recasts, adds share price slump, background on previous forecast cut)

March 16 (Reuters) - Australian hearing implant maker Cochlear Ltd scrapped its full year earnings forecast on Monday, citing delayed surgeries and lower sales due to the rapid spread of the coronavirus in Europe and the United States.

Cochlear had just last month cut its profit forecast for the year because of delays to surgeries in another one of its key markets, China, the epicentre of the outbreak.

Shares in Cochlear plummeted 16.7% in morning trade on the Australian stock exchange, far outstripping a 4.7% fall on the broader market.

“There is a high level of uncertainty surrounding the impact of COVID-19 in terms of the extent and duration of the reduction in surgeries and the ability for recipients to access sound processor upgrades,” Chief Executive Officer Dig Howitt said in a statement.

“We expect to experience a significant decline in sales in the immediate future.”

Cochlear last month forecast underlying profit for fiscal 2020 of between A$270 million and A$290 million, down from a prior forecast of between A$290 million and A$300 million.

In a sign of some positivity, Cochlear said there was a “small but growing number” of surgeries back on track in China over the past few weeks.

The company also said it was putting a freeze on hiring and will reduce non-essential spending and capital expenditure for the remainder of the year.

$1 = 1.6184 Australian dollars Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim Coghill and Jane Wardell

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