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Yahoo
3 days ago
- Business
- Yahoo
Cochlear Ltd (CHEOF) (FY25) Earnings Call Highlights: Navigating Growth and Challenges
Revenue Growth: 4% overall revenue growth. Net Profit Growth: 1% net profit growth. Cochlear Implant Revenue: 9% growth in cochlear implant revenue, with 12% growth in systems. Developed Markets Unit Growth: 6% increase in units. Emerging Markets Growth: Over 20% growth, with a shift towards lower-priced, lower-tier products. Services Revenue: Declined by 10%, with expectations for growth in FY26. Acoustics Revenue Growth: 6% growth, with Osia growing 30%. Gross Margin: Declined by 1 percentage point to 74%. Operating Expenses: Increased by 5%, with a focus on long-term growth and R&D. Inventory Levels: Increased by $108 million ahead of new product launches. Operating Cash Flow: Declined by $150 million due to increased working capital and higher income taxes paid. CapEx: $103 million, including capacity expansion investments. FY26 Guidance: Net profit guidance range of $435 million to $460 million, reflecting 11% to 17% growth. Warning! GuruFocus has detected 2 Warning Sign with CHEOF. Release Date: August 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cochlear Ltd (CHEOF) has consistently increased its R&D investment year on year, even when sales have declined, ensuring the protection of its market leadership position. The launch of the Nexa system, a breakthrough product, is expected to drive growth with its advanced features, including the world's first smart cochlear implant. The company is seeing strong growth in emerging markets, with over 20% growth in cochlear implant revenue. Cochlear Ltd (CHEOF) is confident in the future growth potential due to the increasing awareness of the link between hearing loss and cognitive decline. The company is actively working on expanding its product pipeline, including the development of a drug-eluting electrode, which could further enhance hearing preservation. Negative Points Sales for FY25 were below expectations, leading to a need for strategic adjustments. The services segment experienced a 10% decline, attributed to factors such as COVID-19 impacts and economic uncertainty, particularly in the US. The gross margin declined by 1 percentage point to 74%, partly due to a shift to lower-margin emerging markets and increased production costs at the Chengdu facility. There is uncertainty in the services segment due to economic conditions and consumer hesitancy, especially in the US market. The volume-based pricing in China presents a headwind for revenue and profit in FY26, impacting the overall financial outlook. Q & A Highlights Q: Can you elaborate on the second-half weighting of sales and the decision to maintain a net profit margin slightly below 18%? A: Sales will be significantly weighted to the second half due to the rollout of the Nexa system, which will not be fully available in all countries in the first half. We expect some surgery holds as people anticipate the new product, which will shift sales to the second half. Regarding the net profit margin, it will be above 17.5%, but we want flexibility to ensure continued investment in R&D and growth, smoothing the path back to 18% without compromising future prospects. - Diggory Howitt, CEO Q: What response are you seeing in markets where the Nexa system has launched, and does this support your growth outlook? A: We are seeing a very positive response, with surgeons describing it as a game changer. The Nexa system's new technology and potential for long-term benefits are recognized, supporting our confidence in achieving over 10% growth in developed markets. We are also pursuing price increases across various markets, contributing to our growth outlook. - Diggory Howitt, CEO Q: Can you clarify the expected growth in services and the factors influencing it? A: We anticipate single-digit growth in services. While there is some caution due to US consumer uncertainty, the long-term growth is driven by the expanding recipient base. Although upgrades are discretionary, they are necessary within a time window as processors wear out, ensuring eventual growth. - Diggory Howitt, CEO Q: How does the Nexa system's multipolar stimulation compare to competitors, and what is the potential for reducing sound processor size? A: Medel does not offer multipolar stimulation, and Advanced Bionics' technology is less advanced. Our Slim Modiolar electrode's proximity to the auditory nerve enhances the benefits of focused stimulation. We foresee further reductions in sound processor size through improved power efficiency and potential advancements in electrode technology. - Diggory Howitt, CEO Q: What impact will the volume-based pricing in China have on revenue and gross margin? A: The volume-based pricing in China will result in a revenue and profit headwind for FY26 compared to FY25. While overall volume has increased, much of the middle-tier pricing has shifted to the low tier, impacting revenue. We are cautious about quantifying the exact impact as the situation is still evolving. - Diggory Howitt, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 days ago
- Business
- Bloomberg
China's Next Market Movers: What Investors Should Watch
Z-Ben Advisors' Peter Alexander says Chinese stocks will likely outperform developed markets in the coming months, with further advances in AI and a meeting between Presidents Trump and Xi among the major catalysts. He speaks on "Bloomberg: The China Show." (Source: Bloomberg)
Bloomberg
14-07-2025
- Business
- Bloomberg
Halfway through the crosscurrents: themes and trends from H1 2025
Sector and style indices Though tech (B500TE) was the largest contributor to US returns through June, the communications sector (B500C) is this year's best performer so far, totaling 13% through the first six months. Names like Meta (+25%) and Netflix (+50%) have been the primary contributors to the sector's hot start to 2025. Of the 11 BICS sectors, only Health Care (B500H) and Consumer Discretionary (B500CD) are in negative territory. Based on the sector observations just mentioned, it should come as no surprise that Growth indices have outpaced their Value equivalents thus far across the cap spectrum. This fact may be hard to believe for some, as the Bloomberg 1000 Value index had a 10% lead on its Growth counterpart at the time of the April lows, when investors sought the relative safety of lower-risk sectors like consumer staples and utilities. That lead proved short lived, as market participants became more optimistic about trade and earnings, with the Bloomberg 1000 Growth Index eking out a return of 6.3% vs 5.9% for its value counterpart. International equity indices Outside of the United States, equity returns have outpaced US markets meaningfully, especially in USD terms. The Developed Markets ex- US Index (DMEU) is up nearly 20% thus far in 2025. In looking closely at these returns, however, nearly half is attributable to dollar weakness, as the Bloomberg Dollar Spot Index (BBDXY Index), which tracks the performance of the dollar verse 10 leading global currencies, is down 9%. Emerging Market equities (EM Index) have also performed well despite the negative trade headlines, outpacing US equites with a 13.4% first half return. Even China (CN Index) has rebounded off the trade-headline lows to return 12.6% thus far. Thematics One common thread among the best and worst performing thematic indices is their current relevance in the political or geopolitical arena. Defense oriented indices have done particularly well this year, especially those with specific regional exposure. The Bloomberg Europe Defense Select Index (BSHIELD), for example, closed out the first half of the year up 77% as Europe aims to not just increase defense spending but also increase in-continent defense reliance in light of the war in Ukraine and historical reliance on the US. Nuclear energy, long shunned by governments the world over, has found a renewed interest as a possible solution for the energy demands of artificial intelligence. Here in the US, reforms have been discussed and implemented to expedite nuclear energy development. Even some European nations are considering reversing nuclear phase-out policies. While names that operate nuclear plants have rallied, so too have other elements of the value chain, such as uranium miners and refiners. The Bloomberg Nuclear Aggregate Index (BNUAP), which seeks to capture those companies exposed to the theme across the value chain, closed out the first half with a 27% return. Geopolitical tensions are rising, supply chains are being reimagined, and the need for resource security is taking center stage. The Bloomberg FAANG 2.0 Select Index (BFAANGST) is a strategically constructed benchmark that captures the essential pillars of modern society: Fuel (F), Aerospace & Defense (A), Agriculture (A), Nuclear (N), and Gold & other Base and Precious Metals (G). Although past performance is not indicative of future results, that index has also outperformed the global equities (WORLD), tallying a 24.8% return year-to-date. Enhanced factors With market volatility, many equity investors have sought ways to de-risk their portfolios. While some have headed for the sidelines, others have instead maintained their equity allocation while employing more defensive positioning. ETF strategies that target low–volatility, quality, and dividend stocks have been gathering assets this year. Nonetheless, many such strategies have struggled this year. Rather than targeting these factors individually, indices that tilt to multiple factors have provided different outcomes in 2025. The Bloomberg Shareholder Yield Index (BSHARP) examines the total return of capital, which includes dividends paid, net buybacks, as well as debt repayment. Using the TLTS function on the Terminal highlights exposure to quality and lower volatility companies relative to the market cap weighted Bloomberg 1000 Index. The Bloomberg Shareholder Yield Index returned 7.8% through the first half of the year, outpacing the Bloomberg 1000 index by 1.61%. Traditional factor-based indices that rely on metrics like profitability, valuation or cash flow to determine security selection may miss potential winners. The Bloomberg Core Earnings Leaders Index (BCORE Index) (developed in partnership with independent research technology firm New Constructs) leverages a pioneering AI-based parsing process and machine learning technology to target a company's Core Earnings by going beyond as-reported fundamentals and into the footnotes, which the market may be missing. That index has returned a robust 12.1% through June, outpacing the Bloomberg 1000 by nearly 6%! Conclusion The rebound in equity markets, particularly here in the U.S., highlights the resilience of investor sentiment in the face of geopolitical headwinds, inflationary concerns, and evolving government policy. The broader macroeconomic and regulatory environment continues to evolve rapidly, and with central banks, governments, and corporations adjusting strategies accordingly, adaptability remains critical. Bloomberg's Equity Indices can help investors dissect markets with clarity and granularity, allowing for timely observations that can help plot a course in real-time.
Forbes
28-04-2025
- Business
- Forbes
How Retirement Investment Strategy Impacts Retirement Spending
When it comes to retirement planning, most people know they need to save, but few understand how certain retirement investment strategies can impact the amount of income they'll actually have. In this article, we'll explore four different retirement investment strategies and how each affects your ability to replace 70% of your pre-retirement income: The MSCI ACWI (All Country World Index ) captures large and mid-cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,558 constituents, the index covers approximately 85% of the global investable equity opportunity set. For a complete description of the index methodology, please see Index methodology. For investment purposes, I use the iShares MSCI ACWI ETF which seeks to track the investment results. The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P Aggregate™ Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs. It has 15,071 constituents. For investment purposes, I use the iShares Core U.S. Aggregate Bond ETF which seeks to track it. Here's the sample case we'll follow: We'll also assume the client will qualify for Social Security benefits, which adjust with inflation. With salary increasing 2.5% per year: Annual retirement contributions: Total future contributions: about $537,000 in future dollars. Using the Social Security Benefits Estimator, this worker could expect about $40,000–$45,000/year starting at full retirement age. Target annual retirement income: 70% of $184,475 = $129,133 (before taxes). Income Sources: Based on these assumed, but not guaranteed, average returns: Here's what each retirement investment mix could grow to by retirement: Retirement investment portfolio mixes Envision Wealth Planning Inc. Note: In the new transition strategy,100% ACWI Pre/60/40 Post, the account grows 100% ACWI until retirement, then rebalances into 60/40 for safer withdrawals. Using a 4% withdrawal* (source: Investopedia): Portfolio strategy and resulting income Envision Wealth Planning Inc. *Note: I am not advocating for 4% withdrawal. It is used here to illustrate the results with that assumption. I advocate working with a designated professional familiar with withdrawal strategies to personalize. Shortfall vs. Goal ($129,133): The 100% ACWI pre-retirement / 60/40 post-retirement approach offers: This helps balance growth and safety, reducing the risk of running out of money later in life. In my Forbes article on maximizing Roth strategies, I discuss similar risk management ideas for building tax-smart, diversified retirement income streams. Even the most aggressive strategy leaves a shortfall. Here's how to fix it: 1. Save More Each Year Boost contributions percentage each year. 2. Delay Retirement Waiting until 70 raises Social Security by about 8% annually. 3. Add Roth Accounts Tax-free income from Roth IRAs and Roth 401(k)s can ease the burden. My article on Roth conversions explains how smart tax moves today can lower taxes later. 4. Adjust Lifestyle Expectations Planning for a 5-10% lower spending target could make a huge difference in retirement security. Retirement investment strategy is a key component of creating future retirement income. Planning for retirement isn't just about picking a number. It's about building a living, breathing strategy that adapts to life's changes. Working with a designated and fiduciary financial planner, such as a Certified Financial Planner, can help you build a personalized plan that keeps growing while protecting what you've worked so hard to build. By using smart retirement investment choices, increasing savings, and planning taxes wisely, you can make sure your retirement isn't just comfortable — it's secure.
