Swiss hearing aid manufacturer Sonova Holding (SOON.S) reported a half-year core profit below market expectations on Friday, primarily due to adverse currency exchange effects, causing its shares to drop 3% in early trading.

The company, which derives roughly one-third of its sales from the U.S. market, faced significant headwinds as a weakened U.S. dollar translated into a 44.9 million Swiss franc reduction in earnings when converting revenues into the Swiss franc.

Financial Performance

For the first half of its fiscal year, which began in April, Sonova posted earnings before interest, taxes, and amortization (EBITA), normalized for non-recurring items, of 316.1 million Swiss francs ($398.6 million). Analysts surveyed by Vara had expected 332.1 million francs, marking a clear shortfall versus consensus estimates.

CEO Eric Bernard highlighted that the company gained market share in the U.S., citing successful re-entry into a major account and strong performance in the Veterans Affairs sector, supported by the launch of new products such as Infinio and Sphere. Bernard expressed confidence that these products would help maintain momentum in the second half of the year.

He also reiterated that Sonova’s core products remain exempt from U.S. tariffs under the Nairobi Protocol, which allows tariff-free imports of medical devices for people with long-term disabilities.

Outlook and Challenges

Sonova maintained its full-year guidance for 14–18% growth in normalized core earnings on a constant currency basis. However, the company now anticipates that negative currency effects will reduce results by 13–14%, up from the previous forecast of a 5–6% hit. Reported sales growth is expected to be reduced by around 6%, versus 4% estimated in May, reflecting the impact of the strong Swiss franc.

Analysts expressed caution, with Urs Kunz from Research Partners noting that achieving the upper end of guidance will be challenging due to currency pressures, while Sibylle Bischofberger from Vontobel highlighted weak sentiment in the hearing aid and medical technology sectors in 2025.

Market Implications

Including the latest share decline, Sonova’s stock has lost nearly 30% of its market value this year amid concerns about slower market growth, U.S. import tariffs, and currency fluctuations, alongside skepticism regarding ambitious full-year targets.

Despite these headwinds, Sonova remains focused on product innovation and market expansion, particularly in the U.S., and aims to leverage new offerings to sustain growth in the coming months.