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Fresenius Medical (FMS) Q2 Earnings & Revenues Top Estimates

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Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported adjusted earnings per share (EPS) of 66 cents in second-quarter 2020, which beat the Zacks Consensus Estimate of 54 cents by 22.2%. Moreover, the bottom line improved 26.9% year over year.

Revenues improved 2.7% year over year to $5.02 billion. The top line also surpassed the Zacks Consensus Estimate by 0.3%.

Segmental Details

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

Health Care Services revenues improved 5% on a year-over-year basis and 4% at constant currency (cc). The improvement came on the back of growth in same market treatments, and contributions from acquisitions.

Health Care Products revenues climbed 6% year over year and 7% at cc. The upside can primarily be attributed to higher sales of products for acute care treatments and disposables for in-center dialysis.

Geographical Growth

North America

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

EMEA

Revenues in this region increased 6% year over year and 8% cc in the quarter. On organic basis, sales in the region advanced 7%.

Asia-Pacific

Revenues in this region declined 2% year over year and 2% at cc in the reported quarter. On an organic basis, sales in the region fell 1%.

Latin America

Revenues in Latin America fell 2% year over year but rose 24% at cc. Organic growth in region was 18%.

Guidance

The following outlook has been provided after taking into account the neutral net impact of COVID-19 in the first half of 2020.

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

Summing Up

Fresenius Medical exited the second quarter on a strong note. 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 and EMEA 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 witnessed decline in revenues in the Asia-Pacific and Latin America regions. Further, the company faces intense competition in the field of health care services, and sale of dialysis products, which remains a concern.

Zacks Rank

The company flaunts a Zacks Rank #1 (Strong Buy).

Other Key Picks

Some other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and West Pharmaceutical Services, Inc. (WST - Free Report) . While both PerkinElmer and West Pharmaceuticals sport a Zacks Rank #1, Thermo Fisher carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus estimate by 6.9%.

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