* Sales under China govt tender scheme fall sharply
* Shares fall 3 pct
* Strong showing for U.S. sales help H1 profit surge 19 pct
(Recasts, adds CEO and analyst comments)
By Tom Westbrook
SYDNEY, Feb 14 Australia's Cochlear Ltd
, the world No.1 hearing implants maker, posted record
half-year profit on a robust U.S. sales but a slump in China
tender orders pushed its share price 3 percent lower.
While Cochlear has come back from a damaging recall in 2011
to book strong results over the past two years on soaring sales
to China, fewer sales under Beijing's national tender scheme for
implants has created new uncertainty for the company.
The number of implants for young children it sold under the
tender scheme fell to 1,100 in the first half from 1,700 a year
earlier and Cochlear cut its full-year outlook for those units
to be lower than 2016 results instead of in line.
"That's a significant decrease ... that's an important
number for us, because remember, with the China tender, you're
either in or you're out, you either ship or you don't," Chief
Executive Chris Smith told a conference call.
Disappointment in China was, however, offset by a strong
showing in North America due to several new products, including
a thinner implant which allows less intrusive surgery. Net
profit for the six months to end-December surged 19 percent to a
record A$111.4 million ($85.1 million).
"The new processor and implant introduced in the second
quarter really seems to have caused a bounce in the U.S.," said
Morningstar health stock analyst Chris Kallos.
Its fastest sales growth, of 10 percent, was in Cochlear's
biggest market in the Americas, which comprises almost half the
company's revenue. Asian sales, which account for almost a
fifth, climbed 4 percent.
Overall, the maker of about two-thirds of all hearing
implants sold globally is tracking toward the upper end of its
own guidance for a full-year profit of between A$210 million and
On an earnings-per-share basis the first-half result of
A$1.94 came in slightly below analyst expectations of A$1.96 but
it raised its interim dividend to A$1.30 per share from A$1.10.
Cochlear shares fell 3 percent in afternoon trade to give
the firm a market value of A$7.4 billion ($5.7 billion), while
the broader Australian market was flat.
($1 = 1.3045 Australian dollars)
(Reporting by Tom Westbrook; Editing by Edwina Gibbs)