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Fresenius Medical (FMS) Q1 Earnings Miss Estimates, Fall Y/Y

Zacks Equity Research

Fresenius Medical Care AG & Co. KGaA FMS reported adjusted earnings per share (EPS) of 52 cents in first-quarter 2020, which missed the Zacks Consensus Estimate of 62 cents by 16.1%. Moreover, the bottom line declined 11.9% year over year.

Revenues improved 5.5% year over year to $4.95 billion and beat the Zacks Consensus Estimate by 1.2%.

Segmental Details

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

Health Care Services revenues improved 8% on a year-over-year basis and 7% at constant currency (cc). The improvement came on the back of growth in same market treatments, contributions from acquisitions, and increase in dialysis days.

Health Care Products revenues climbed 10% year over year and 9% at cc. The upside can primarily be attributed to higher sales of products for acute care treatments, renal pharmaceuticals and bloodlines. Lower volume of sales of dialysis machines partially negated the upside.

Fresenius Medical Care AG Co KGaA Price, Consensus and EPS Surprise

 

Fresenius Medical Care AG Co KGaA Price, Consensus and EPS Surprise

Fresenius Medical Care AG Co KGaA price-consensus-eps-surprise-chart | Fresenius Medical Care AG Co KGaA Quote

Geographical Growth

North America

Revenues in the region grew 10% year over year and 7% at cc. On organic basis, sales in the region improved 3%.

EMEA

Revenues in this region increased 4% year over year and 4% cc in the quarter. On organic basis, sales in the region advanced 3%.

Asia-Pacific

Revenues in this region improved 4% year over year and 3% at cc in the reported quarter. On an organic basis, sales in the region improved 2%.

Latin America

Revenues in Latin America rose 4% year over year and 24% at cc. Organic growth in region was 17%.

Guidance

Following is the outlook provided in February, which excludes the impact of the COVID-19 pandemic.

For 2020, the company expects adjusted revenues and adjusted net income to improve at a mid-to-high-single digit rate.

Summing Up

Fresenius Medical reported mixed results in the first quarter. The company continues to gain from Health Care Products and Services units, which witnessed revenue growth in the quarter under review. Revenues in the North American, EMEA and Asia-Pacific regions also improved. In fact, management remains optimistic regarding the buyouts of Sound Physicians and NxStage Medical.

Furthermore, strong view for 2020 paints a brighter picture. Revenue growth in the reported quarter highlights the company’s underlying business development remaining intact and resiliency of its business model.

However, Fresenius Medical faces intense competition in the field of health care services, and sale of dialysis products, which remains a concern.

Zacks Rank

The company carries a Zacks Rank of 4 (Sell).

Key Picks

Some better-ranked stocks in the broader medical space are Aphria Inc. APHA, Biogen Inc. BIIB and Eli Lilly and Company LLY.

Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, beating the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million surpassed the consensus mark by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.

Eli Lilly reported first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.

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