Sonova's profit warning less severe than feared; shares jump 7%

By Ozan Ergenay and Anastasiia Kozlova

(Reuters) - Sonova's shares jumped more than 7% early on Tuesday after the Swiss hearing aid maker's downward adjustment of full-year core earnings estimates was less severe than investors had feared.

The world's largest maker of hearing aids expects its annual adjusted core earnings (EBITA) to grow between 4% and 8% in local currency, compared with a previous target of 6% to 10%.

"Shares are trading up, most likely because there is a relief in the market that the profit warning was not bigger than what it turned out to be," Carnegie analyst Niels Granholm Leth said.

Sonova cited higher investments to sustain growth in its two main business units, Hearing Instruments and Audiological Care, for the outlook cut, and reaffirmed its sales growth forecast of 3% to 7%.

Urs Kunz, an analyst at Research Partners, said the revised earnings outlook was already reflected in consensus estimates.

While the market has recovered from COVID-related lockdowns that prevented people from seeing doctors or audiologists, demand for hearing aids has stayed muted as high inflation pushed up prices last year.

"We see the hearing care market being resilient today," CEO Arnd Kaldowski told Reuters, adding Sonova was recovering faster than the general consumer market from the "relatively unusual temporary decline" in the hearing care market.

"We continue our investment strategy despite a more muted performance in H1," Kaldowski said.

The investments were focused on innovation and high growth markets, China in particular, he added.

Sonova reported an adjusted EBITA of 350 million Swiss francs ($395 million) for the first six months, up 2.5%, slightly below analysts' average forecast of 355.4 million.

Sales rose 1.6% in local currencies, but declined 5.1% when taking into account negative currency effects when converted into Swiss francs, reaching 1.75 billion francs in the half-year period.

($1 = 0.8855 Swiss francs)

(This story has been corrected to say that the sales rose 1.6% in local currencies, not in Swiss francs, in paragraph 11)

(Reporting by Ozan Ergenay and Anastasiia Kozlova in Gdansk; editing by Milla Nissi, Bernadette Baum and Louise Heavens)