The Cochlear Limited (ASX: COH) share price has been a solid performer on Tuesday.
In morning trade, the hearing solutions company’s shares are up 2.5% to $220.50.
Why is the Cochlear share price rising today?
Investors have been bidding the Cochlear share price higher today following the release of its annual general meeting update.
As well as giving investors a breakdown on how the company performed in FY 2021, management provided its expectations for the current financial year.
The good news, and potentially why the Cochlear share price is rising today, is that management continues to forecast solid earnings growth in FY 2022.
What is expected in FY 2022?
Cochlear’s CEO and President, Dig Howitt, revealed that the company’s performance during the first quarter of FY 2022 was in line with expectations.
In light of this, Mr Howitt continues to forecast underlying earnings growth of between 12% and 20% this year.
He commented: “We provided earnings guidance for FY22 at the release of our results in August, outlining how we expect to increase underlying net profit by between 12 and 20%, and this continues to be the case.”
“Sales revenue is expected to benefit from market growth, with a continuing recovery in surgery rates across many countries more affected by COVID. We will continue our investment in market growth activities, with the net profit margin expected to remain a little below our longer‐term target of 18%,” he added.
Mr Howitt also provided colour on how both developed and emerging markets are performing.
In respect to the former, he said: “Developed markets are expected to continue to grow in FY22. While hospitals and clinics have adapted to operating during the pandemic, surgery rates continue to be variable across many countries.”
Whereas for the later, he commented: “The rate of recovery in emerging markets has varied. We expect continued improvement but at a slower rate than developed markets, with some countries well down on FY19 levels and not likely to recover fully in FY22.”
Overall, based on the Cochlear share price performance today, this appears to have gone down well with the market.
The post Cochlear (ASX:COH) share price charges higher on AGM update appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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