Cochlear to defend action by investors

By the Editorial Team · Wednesday, September 30, 2026

Cochlear will contest a class action lawsuit accusing the company of misleading shareholders about its profit forecasts and failing to disclose material information, following significant downward revisions to its FY26 profit guidance. The case highlights investor concerns over the company’s transparency and comes as Cochlear faces continued share price pressure and critical upcoming investor meetings.

Cochlear, the global leader in hearing implant devices, announced it will contest a class action lawsuit filed in the Supreme Court of Victoria related to its profit forecasts and share price performance earlier this year. The legal action, lodged on behalf of shareholders who purchased Cochlear shares between August 15, 2025, and April 21, 2026, alleges that the company engaged in misleading or deceptive conduct and failed to continuously disclose material information about its expected financial performance.

The dispute centers on a series of profit guidance revisions issued by Cochlear during the 2026 fiscal year. In August 2025, the company reported a strong outlook for FY26 underlying net profit, forecasting a range between AUD 435 million and AUD 460 million—representing an 11 to 17 percent increase on the previous year. However, at the release of its half-year results in February 2026, Cochlear lowered this guidance to the "lower end" of the initial forecast.

The outlook was further revised downward in April, with the company projecting a full-year underlying net profit between AUD 290 million and AUD 330 million. The announcement on April 22 triggered Cochlear’s worst one-day share price decline in three decades, with the company attributing the shock to several factors, including weaker-than-expected sales, potential receivables provisions linked to geopolitical tensions in the Middle East, reduced gross margins, restructuring expenses, and the impact of a stronger Australian dollar on earnings.

Cochlear’s audited FY26 results, released in August, reported an underlying profit of AUD 322 million, near the upper limit of the April guidance. The company has since provided FY27 guidance of AUD 330 million to AUD 350 million in underlying profit.

Litigation firm Echo Law, representing the class action plaintiffs, contends that Cochlear’s disclosures misled investors regarding the company’s financial health and breached its continuous disclosure obligations. Echo Law’s principal lawyer, Eleanor Toohey, emphasized that investors have the right to receive full and timely information from publicly listed companies, ensuring informed investment decisions.

Cochlear has categorically denied the allegations and confirmed its intention to defend the legal proceeding vigorously. Following a nearly 45 percent share price decline over the past year, with shares at approximately AUD 144, the company faces scrutiny ahead of two major investor events scheduled for October 26 and November 13. The upcoming annual general meeting on October 26 includes a resolution on remuneration for Chief Executive Dig Howitt, whose FY27 total compensation package comprises AUD 2.24 million in fixed pay, a AUD 2.2 million short-term incentive target, and AUD 2.7 million in long-term incentives. Notably, Mr. Howitt did not receive a short-term incentive payment for FY26 due to the company’s financial performance.

On the day the class action was announced, Cochlear shares fell 0.5 percent to AUD 144.36.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.