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Sonova Declines as Profit Forecast Disappoints Analysts

Sonova Holding AG fell the most in more than a year in Zurich trading after the maker of Phonak hearing aids forecast full-year profit and sales will rise less than analysts expected.

The shares fell 9.9 percent to close at 84.10 Swiss francs, the biggest decline since March 30, 2011.

Sales will probably rise 7 percent to 9 percent and earnings before interest, tax and amortization will probably gain 15 percent to 20 percent this year, excluding currency swings, the Staefa, Switzerland-based company said in a statement today. This is Sonova’s first forecast since Lukas Braunschweiler became chief executive officer in November.

“Guidance looks on the weak side, but could be conservative due to new management,” wrote Ingeborg Oie, an analyst at Jefferies International Ltd., in a note to investors, adding that the consensus was for profit growth on that basis of 27 percent.

Earnings before interest and tax rose to 287.7 million Swiss francs ($306 million) in the 12 months through March from 270.8 million francs a year earlier. That missed the 303.5 million-franc average estimate of 13 analysts surveyed by Bloomberg.

The weakness of currencies such as the dollar and the euro against the franc meant that while full-year sales rose 12 percent in local currencies, growth was 0.2 percent when translated into francs, Sonova said. That cut revenue by 184 million francs.


“Organic growth is disappointing,” Oliver Metzger, an analyst with Commerzbank AG in Frankfurt, said today. He said organic growth, which excludes currency effects, in the company’s main hearing-aid business was 2 percent in the second half of the year.

The dollar was 13 percent lower against the franc on average during Sonova’s most recent fiscal year, while the euro was 9.3 percent weaker.

Operating profit, or earnings before interest, taxes and amortization, fell to 315.2 million francs from 326.6 million francs a year earlier. Negative currency effects reduced profit by 82 million francs.

The company also proposed a dividend of 1.20 francs.

Sonova reorganized its international sales force this year, splitting it into three units, each headed by an executive who reports directly to CEO Braunschweiler.

Sonova said April 2 that it formally objected to a summons for 26 million francs filed by a Belgian shareholder group over last year’s profit warning which resulted in an insider trading investigation of management at the time.

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