FILE PHOTO: Logo of Swiss hearing aid maker Sonova is seen at the company's headquarters in Staefa, Switzerland May 16, 2017. REUTERS/Arnd Wiegmann/File Photo
(Reuters) - Sonova reported half-year core profit below market expectations on Tuesday, hit by costs related to the launch of its new AI-boosted hearing device which it is betting on to regain market share.
The world's largest maker of hearing aids reaffirmed its targets for the year through March 2025 and projected significantly higher profitability in the second half of it, buoyed by stronger sales and easing launch costs.
However, it said it was initiating targeted cost measures to improve its profitability, which Carnegie analyst Niels Granholm-Leth said suggested cost savings were needed to meet the annual targets.
Sonova's shares fell 2% by 0940 GMT.
The Swiss group gained an edge over its peers in August when it introduced a first-in-market hearing aid utilising real-time AI, as tech-driven competition intensifies in the sector.
The timeline of the launch also strengthens Sonova's position, as its rivals are unlikely to come up with the same technology soon, CEO Arnd Kaldowski told Reuters.
Vontobel analysts have said they expect peers to launch improved AI devices by the end of 2025.
The launch of the new hearing aid family and its reported return as a Costco supplier have helped Sonova's shares to outperform peers like Amplifon, GN Store Nord and Demant this year.
Since its launch, the new product has shown strong sales momentum, making up more than 50% of units sold under the Infinio brand, the company said.
Asked about Donald Trump's re-election, Kaldowski said Sonova would stick to its "wait and see" strategy until the new administration's plans became clearer. The U.S. market makes up nearly a third of Sonova's sales.
Trump's victory should not affect Sonova's performance in the U.S. as there are no home-grown hearing aid producers in the United States, Research Partners analyst Urs Kunz said ahead of the results publication.
($1 = 0.8834 Swiss francs)
(Reporting by Amir Orusov and Anastasiia Kozlova in Gdansk, additional reporting by Paolo Laudani; editing by Milla Nissi)
