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Fresenius Medical (FMS) Q1 Earnings & Revenues Top Estimates

Zacks Equity Research

Fresenius Medical Care AG & Co. KGaA FMS posted adjusted earnings per share (EPS) of 59 cents in the first quarter of 2019, which beat the Zacks Consensus Estimate of 52 cents. The bottom line also grew 8% year over year and 3% at constant currency (cc).

 

Revenues increased 4% to $4.69 billion, which came well ahead of the Zacks Consensus Estimate of $4.61 billion. However, the top line fell 1% at cc.

 

Segmental Details

 

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

 

Health Care Services revenues increased 3% on a year-over-year basis but fell 2% at cc. The decline at constant currency was largely due to  activities associated with Sound Physicians.

 

Health Care Products revenues shot up 6% year over year and 4% at cc. The upside was mainly driven by higher sales of home hemodialysis products, largely as a result of the NxStage acquisition, dialyzers and products for acute care treatments.

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 Quote

Geographical Growth

 

North America

 

Revenues in the region grew 4% year over year but fell 4% at cc. On organic basis, sales in the region grew 6%.

 

EMEA

 

Revenues in this region rose 3% year over year and 4% at cc in the quarter. Per management, solid business development in both Health Care Services and Health Care Products led to the improvement.

 

Asia-Pacific

 

Revenues in this region increased 9% year over year and 6% at cc in the quarter. Per management, higher sales of products for chronic hemodialysis and acute care treatments resulted in the upside.

 

Latin America

 

Revenues in Latin America dropped 5% year over year but increased 14% at cc. Organic growth in region was 13%.

 

Guidance

 

For 2019, Fresenius Medical expects adjusted revenues to grow between 3% and 7%, and adjusted net income to develop in the range of  a negative 2% to a positive2%.

 

For 2020, this Zacks Rank #3 (Hold) company expects adjusted revenues as well as adjusted net income to grow at a mid- to high-single digit rate.

 

Summing Up

 

Fresenius Medical posted solid results in the first quarter. The company continues to gain from its Health Care Products and Services units, which saw a revenue upside in the quarter under review. Revenues in the EMEA and Asia Pacific regions also shot up. In fact, management is optimistic about the 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 Latin American revenues raise concern. Decrease in dialysis operating margin is also worrisome.

 

Earnings of MedTech Majors at a Glance

 

Some better-ranked stocks which reported solid results this earning season are Stryker Corporation SYK, Abbott Laboratories ABT and CONMED Corporation CNMD, each carrying a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

 

Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

 

Abbott reported first-quarter 2019 adjusted EPS of 63 cents, which surpassed the Zacks Consensus Estimate by 3.3%. First-quarter worldwide sales came in at $7.54 billion, above the Zacks Consensus Estimate of $7.47 billion.

 

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which exceeded the Zacks Consensus Estimate of 54 cents. Revenues of $218.4 million outpaced the consensus estimate of $213 million.

 

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