Fresenius Medical (FMS) Q1 Earnings Beat, Operating Margin Up

08.05.24 17:23 Uhr

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Fresenius Medical Care AG & Co. KGaA FMS reported first-quarter 2024 adjusted earnings per share (EPS) of 36 cents, which beat the Zacks Consensus Estimate of 26 cents by 38.5%. The bottom line improved 28.6% year over year.Revenue DetailsRevenues of $5.13 billion (EUR 4,725 million) missed the Zacks Consensus Estimate by 0.3%. However, the company’s reported revenues were up 0.4 year over year and 2.5% at constant currency (cc).Segmental DetailsFresenius Medical implemented a new operating model during the first quarter and started reporting under two new segments,  Care Delivery and Care Enablement. Previously, the company reported under the Health Care Products and Health Care Services segments. The Care Delivery segment primarily consists of products earlier reported under Health Care Services.Care DeliveryThe segment’s revenues were flat on a year-over-year basis but gained 8% at cc and 2% on an organic basis.Revenues in the U.S. markets gained 3% reportedly, 5% at cc and 6% on an organic basis. Sales were driven by value-based care business growth, reimbursement rate increases and a favorable payor mix, partially hurt by missed treatments due to adverse first-quarter weather events, an unusually mild 2023 flu season and capacity constraints in clinics.FMS stated that the annualization effect of COVID-related excess mortality in the late-stage chronic kidney disease and end-stage renal disease population continues to hurt treatment growth in the U.S. market, albeit at a slower pace.International sales declined 9% reportedly and 4% at cc but gained 4% on an organic basis. A negative exchange rate effect was partially offset by organic growth.Care Enablement The segment’s revenues decreased 1% year over year, but rose 1% at cc and 2% on an organic basis. A negative exchange rate effect and negative volume growth were partially offset by the positive impacts of improved pricing.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 QuoteMarginsOperating income, excluding special items and U.S. Provider Relief Funding, was up 23% from the prior-year quarter. The figure also rose 23% at cc. Operating margin, excluding the aforementioned items, was 8.6%, up 130 bps from the year-ago quarter’s actuals.2024 OutlookFresenius Medical maintained its outlook for revenues in 2024. The company expects revenues to grow at a low-to-mid single-digit percentage rate. The operating income is estimated to grow at a mid to high-teens percentage rate.Summing UpFMS exited the first quarter on a strong note, with its earnings reflecting strong organic growth on the back of improving treatment volumes as well as a stabilizing labor environment in the United States. Continued improvement in these two key factors will be beneficial for the company in 2024. Overall price improvements also supported growth in the Care Enablement segment. However, a weak flu season will likely continue to have a negative impact on sales .Meanwhile, FMS’ newly implemented operating model led to operational improvements. The bottom line was hurt by inflationary cost increases in energy, material and personnel. These headwinds are likely to improve over the year, which is also reflected in the company’s operating outlook.In 2023, FMS generated 346 million euros in savings by implementing initiatives under its FME25 transformation program. The figure beat the company’s target of 250-300 million euros. Fresenius Medical expects to save 650 million euros by 2025 end. These savings are likely to continue to improve the operating margin going forward.The company’s continued divestment of its noncore and dilutive assets seems promising as it will help focus on its core and growing categories as well as boost its cash resources.Despite mixed results, shares of Fresenius Medical gained 2.6% in pre-market trading. So far this year, the company’s shares have lost 3.4% against the industry’s 5.3% growth. The S&P 500 increased 9.1% in the same time frame.Image Source: Zacks Investment ResearchZacks Rank and Stocks to ConsiderFresenius Medical currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. ALGN, Ecolab ECL and Boston Scientific Corporation BSX.Align Technology, currently carrying a Zacks Rank #2 (Buy), reported first-quarter adjusted EPS of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the consensus estimate by 4.9%. It currently carries a Zacks Rank of 2.Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.5%.Top 5 Dividend Stocks for Your RetirementZacks targets 5 well-established companies with solid fundamentals and a history of raising dividends. More importantly, they have the resources and will to likely pay them in the future.Click now for a Special Report packed with unconventional wisdom and insights you simply won’t get from your neighborhood financial planner.See our Top 5 now – the report is FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Ecolab Inc. (ECL): Free Stock Analysis Report Align Technology, Inc. (ALGN): Free Stock Analysis Report Fresenius Medical Care AG & Co. KGaA (FMS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks

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Nachrichten zu Fresenius SE & Co. KGaA (St.)

Analysen zu Fresenius SE & Co. KGaA (St.)

DatumRatingAnalyst
11.06.2024Fresenius SECo BuyDeutsche Bank AG
06.06.2024Fresenius SECo BuyJefferies & Company Inc.
06.06.2024Fresenius SECo NeutralJP Morgan Chase & Co.
05.06.2024Fresenius SECo OverweightBarclays Capital
05.06.2024Fresenius SECo BuyJoh. Berenberg, Gossler & Co. KG (Berenberg Bank)
DatumRatingAnalyst
11.06.2024Fresenius SECo BuyDeutsche Bank AG
06.06.2024Fresenius SECo BuyJefferies & Company Inc.
05.06.2024Fresenius SECo OverweightBarclays Capital
05.06.2024Fresenius SECo BuyJoh. Berenberg, Gossler & Co. KG (Berenberg Bank)
05.06.2024Fresenius SECo BuyJefferies & Company Inc.
DatumRatingAnalyst
06.06.2024Fresenius SECo NeutralJP Morgan Chase & Co.
20.05.2024Fresenius SECo NeutralJP Morgan Chase & Co.
08.05.2024Fresenius SECo NeutralJP Morgan Chase & Co.
23.04.2024Fresenius SECo NeutralGoldman Sachs Group Inc.
18.04.2024Fresenius SECo NeutralJP Morgan Chase & Co.
DatumRatingAnalyst
02.11.2021Fresenius SECo UnderperformJefferies & Company Inc.
30.07.2021Fresenius SECo UnderperformJefferies & Company Inc.
23.07.2021Fresenius SECo UnderperformJefferies & Company Inc.
17.03.2021Fresenius SECo UnderperformJefferies & Company Inc.
23.02.2021Fresenius SECo UnderperformJefferies & Company Inc.

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