By Stuart Condie

SYDNEY--Cochlear shares are on course for their worst day since the hearing-implant maker went public in 1995, tumbling 40% after the Australian company slashed its annual profit guidance on weak U.S. consumer sentiment and the Iran conflict.

Cochlear, which developed the world's first hearing implant in the 1970s after its founder experimented with a blade of grass inside a shell found on an Australian beach, warned that its annual profit would be as much as 33% lower than previously flagged.

It pointed to softer recent demand in developed markets and uncertainty over Middle East sales for the remainder of its fiscal year, which ends June 30.

"Consumer sentiment has declined in key markets, reaching historic lows in the U.S.," Cochlear said Wednesday. "The decline appears to be affecting discretionary healthcare decisions in the adults and seniors segment, adding to demand uncertainty in the near term."

The announcement wiped about 4.4 billion Australian dollars, equivalent to US$3.15 billion, from Cochlear's market capitalization.

Midway through Wednesday's trading session, Cochlear's Australia-listed stock was down 40% at A$100.30. The stock, which peaked at A$350.31 in July 2024 and was still trading above A$275.00 in January this year, has never previously lost more than 24% in a day.

It hasn't closed at such a low level since March 2016.

Cochlear now expects annual underlying net profit of between A$290 million and A$330 million. It had previously guided underlying net profit to be at the lower end of a A$435 million-A$460 million range.

It warned that it may yet need to provision some receivables due to the Middle East conflict, which could hit its annual profit as much as A$10 million.

Jarden analysts called the scale of the guidance downgrade "staggering."

"This downgrade is far worse than anticipated," analysts Steve Wheen and Tristan Maher said in a note.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

April 22, 2026 00:03 ET (04:03 GMT)

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