Swiss hearing aid maker Phonak has announced a drop in net profits of more than 35 per cent to SFr42.6 million ($27.1 million) over the past year.
But the company said it expects higher sales and a profit recovery of 20 per cent in the next year, due to new product launches and trimmed down costs.
Phonak, which reshuffled its management in April, has had a turbulent few months with profit warnings, falling stock prices and the abrupt resignation of CEO Peter Pfluger.
Despite increasing sales, profits fell off but were better than the SFr36 million that analysts had forecast.
Back in February, Phonak warned on profits, citing the late launch of high margin products and the problematic integration of Canadian Unitron, the hearing aid company it acquired for SFr200 million.
Phonak expects new product launches to boost sales by ten per cent in the next year, but said this was dependent on how quickly new products could be brought to market.
In a statement the company said: "The Group has made very encouraging progress enlarging its product offering under both Phonak and Unitron Hearing brands. More than ever, the product pipeline is broad and competitive."
The company is now being led by board chairman and former CEO Andy Rihs, as the company searches for a new CEO that can bring marketing and sales experience to the table. Phonak said the name of the new CEO should be announced by the end of 2002.
In April the company said it expected sales to increase by over 25 per cent to SFr576.1 million in the 2001/2002 business year.
The company's profit warning in February chopped 25 per cent of its market value - leading Pfluger to step down - which has kept analysts cautious on the stock.
Phonak is the third largest hearing aid manufacturer in the world.
swissinfo with agencies