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Fresenius Medical (FMS) Earnings Beat, Revenues Miss in Q4

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Fresenius Medical Care AG & Co. KGaA FMS posted adjusted earnings of 66 cents per share in the fourth quarter of 2018, which beat the Zacks Consensus Estimate of 64 cents. Earnings declined 4.3% year over year.

In the quarter under review, revenues fell 5.9% to $4.90 billion, which lagged the Zacks Consensus Estimate of $5.01 billion. At constant currency (cc), revenues rose 7%.

The stock carries a Zacks Rank #3 (Hold).

Segmental Details

In the fourth quarter, Fresenius Medical reported through two segments — Health Care Services and Health Care Products.

Health Care Services revenues declined 5% at cc on a year-over-year basis.

Health Care Products revenues shot up 5% year over year and 6% at cc.

Geographical Growth

North America

Revenues in the region fell 6% year over year and 9% at cc owing to the divestiture of Care Coordination.


Revenues in this zone rose 3% year over year and 5% at cc in the quarter. Per management, the company’s non-dialysis products contributed to the region’s revenues. However, full-year sales in the region were impacted by lower sales of dialyzers as well as products for peritoneal dialysis.


Revenues in this region increased 9% year over year at cc in the quarter. Per management, higher sales of products for chronic hemodialysis and acute care treatments drove the upside.

Latin America

Revenues in Latin America saw a drop of 2% year over year and an increase of 33% at cc.


For 2019, Fresenius Medical expects adjusted revenue growth between 3% and 7%. The Zacks Consensus Estimate is pegged at $19.83 billion. For 2020, adjusted revenues as well as adjusted net income are estimated to grow at mid-to-high single digits.

Summing Up

Fresenius Medical posted mixed results in the fourth quarter. The company continues to gain from its Health Care Products unit which saw a revenue upside in the quarter. Revenues in EMEA and Asia Pacific regions also shot up. In fact, management is optimistic about the recent buyouts of Sound Physicians and NxStage Medical. Furthermore, a strong view for 2019 and 2020 paints a brighter picture. Management expects to undertake meaningful investments in 2019 to capture growth opportunities and optimize cost base.

On the flip side, year-over-year decline in earnings and revenues is discouraging. Lackluster performance by the Health Care Services segment is a concern. The company witnessed lower growth in the commercial dialysis services revenues which impeded growth in Latin America and North America.

Earnings of Other MedTech Majors at a Glance

Some better-ranked MedTech stocks that posted solid quarterly results are Varian Medical Systems VAR, AngioDynamics ANGO and CONMED Corporation CNMD.

Varian reported fiscal first-quarter adjusted EPS of $1.06, in line with the Zacks Consensus Estimate. Revenues of $741 million outpaced the consensus mark of $717.9 million. The stock has a Zacks Rank #2 (Buy).

AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, which surpassed the consensus estimate by 2.9%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million exceeded the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report
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