Despite a stellar year thus far, August has not been kind to the Cochlear Limited (ASX: COH) share price.
Shares in the hearing implant manufacturer closed nearly 6% lower for the month, swapping hands for $233.20 at the end of trading yesterday.
Many investors were quick to dump their shares in Cochlear after the company released its full-year results for FY21.
Let's take a look at what happened with the Cochlear share price in August.
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Cochlear share price tanks on FY21 results
Much of the decline in Cochlear's share price in August can be attributed to the company's results for FY21.
Despite meeting guidance and delivering a dividend boost, investors were quick to sell their shares in the company.
Highlights from Cochlear's full-year report for FY21 included;
- Cochlear implant units up 15% to 36,456
- Sales revenue up 10% to $1,493.3 million
- Underlying net profit up 54% to $236.7 million
- Net profit margin expanded from 11% to 16%
- Underlying earnings per share (EPS) up 40% to $3.60
- Full year dividend up 59% to $2.55
- FY 2022 guidance: Net profit growth of 12% to 20%
Cochlear noted that a successful rollout of COVID-19 vaccines will see elective surgeries return to their pre-pandemic levels.
Why were shares in Cochlear sold-down?
Although Cochlear met many of its key metrics, the company performed below market expectations.
The company had previously set an underlying net profit guidance for FY21 of between $225 million and $245 million.
However, analysts were expecting the company to hit the top-end of its guidance and anticipated a return to normal growth in FY22-23.
The dour outlook on Cochlear's share price was reflected in a recent note from leading broker Citi.
Analysts from the broker retained a sell rating on the company with a share price target of $220.00.
According to the note, analysts expect lower margins and cautioned that Cochlear's sales may take longer to normalise.
Snapshot of the Cochlear share price
Despite a disappointing performance in August, the Cochlear share price has had a stellar year thus far.
Shares in the hearing implant company have soared more than 22.5% since the start of 2021.
Prior to releasing its full-year report for FY21, the Cochlear share price was up more than 35% for the year and trading at record highs.
