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Fresenius Medical (FMS) Q3 Earnings, Sales Beat Estimates

Zacks Equity Research

Fresenius Medical Care AG & Co. KGAA FMS reported adjusted earnings of 54 cents per American Depositary Share (ADS) in the third quarter of 2016, beating the Zacks Consensus Estimate of 52 cents. Also, earnings per ADS increased from 43 cents earned in the year-ago quarter.

Revenues increased 9% at constant currency on a year-over-year basis to $4,598 million and beat the Zacks Consensus Estimate of $4,561 million.

Segment Details

Net Healthcare revenues grew 10% to $3.73 billion, with significant contribution from the North American market. Dialysis product revenues increased 4% to $864 million.

By geography, North America revenues rose 10% year over year to $3,300 million. Health care services revenue grew 10% to $3,068 million. Revenues from the care Coordination business grew an impressive 29% to $618 million. Dialysis business grew by 6% in the reported quarter.

EMEA revenues increased 2% year over year to $675 million. Health care services revenues increased 8% (up 10% at constant currency) to $335 million driven by higher contributions from acquisitions (8%). Dialysis treatments increased 9% in the reported quarter. Dialysis products’ revenue decreased 3% (down 1% at constant currency) to $340 million primarily attributed to lower sales of dialyzers, machines, renal pharmaceuticals and bloodlines.

Revenues from Asia-Pacific grew 8% to $427 million. Net Health Care revenues were $192 million driven by 5% growth in dialysis treatments. The product business surged more than 11% at constant currency to $235 million, owing to strong sales performance across the entire dialysis products range.

Latin America revenues increased 9% to $192 million. Health care services revenue increased 6% to $139 million (up 31% at constant currency) on the back of higher organic revenue per treatment primarily driven by a retrospective reimbursement rate increase, contributions from acquisitions and growth in same market treatments. Dialysis treatments increased 19% to $53 million. This was due to higher sales of dialyzers, concentrates and bloodlines.
 

FRESENIUS MED Price, Consensus and EPS Surprise

FRESENIUS MED Price, Consensus and EPS Surprise | FRESENIUS MED Quote

Guidance

For 2016, Fresenius Medical estimates revenue growth of 7–10% at constant currency excluding acquisitions. Net income attributable to shareholders of the company is likely to increase around 15–20%.

Zacks Rank & Key Picks

Currently, Fresenius Medical carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector are Intuitive Surgical Inc. ISRG, AngioDynamics Inc. ANGO and Glaukos Corporation GKOS.

Notably, all the stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical has a long-term expected earnings growth rate of approximately 11.35%. The stock represents an impressive one-year return of approximately 33.04%.

AngioDynamics has a long-term expected earnings growth rate of 15.00%. The company posted a solid one-year return of almost 25.7%.

Glaukos Corporation recorded a stellar one-year return of almost 63.1%. Notably, the company posted positive surprises in the past four quarters, the average being 110.93%.

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