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Fresenius Medical (FMS) Q4 Earnings Beat, Revenues Miss

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Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported fourth-quarter adjusted earnings per share (EPS) of 73 cents, which beat the Zacks Consensus Estimate of 70 cents by 4.3%. However, the bottom line declined 2.7% year over year.

Revenues increased 3.4% year over year to $5.25 billion. However, the top line missed the Zacks Consensus Estimate by 8.9%.

Segmental Details

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

Health Care Services revenues fell 6% on a year-over-year basis but grew 2% at constant currency (cc). Favorable development in the Products business partially offset the downside.

Health Care Products revenues rose 2% year over year and 5% at cc driven by solid organic growth.

Geographical Growth

North America

Revenues in the region declined 6% on a year-over-year basis, while growing 2% at cc. On organic basis, sales in the region fell 1%.

EMEA

Revenues in this region rose 1% on a year-over-year basis and grew 7% cc in the quarter. On organic basis, sales in the region increased 5%.

Asia-Pacific

Revenues in this region grew 4% year over year and 7% at cc in the reported quarter. On an organic basis, sales in the region climbed 8%.

Latin America

Revenues in Latin America fell 9% year over year but rose 16% at cc. Organic growth in region was 9%.

Guidance

Fresenius Medical anticipates substantial COVID-19 impact in 2021. Due to impact of the pandemic, excess mortality of dialysis patients is continuing into 2021 and is projected to impact treatment volumes and additional costs associated to COVID-19.

Given this environment, the company estimates revenue to improve at a low-to-mid-single digit percentage rate. Net income is expected to decline at a high-teens to mid-twenties percentage rate against the better-than-expected 2020 base.

Summing Up

Fresenius Medical exited the fourth quarter on a mixed note. The company continues to gain from Health Care Products unit, which witnessed revenue growth in the quarter under review on both reported and constant currency basis. Revenues in the EMEA and Asia Pacific regions witnessed noticeable improvement in the fourth quarter.

Notably, the company will introduce a new program in order to provide support to its 2025 strategy, further boost profitability and compensate for the negative earnings impact of the pandemic. The main focus of the program will be on simplification of the company’s operating model.

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 North America 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 has a Zacks Rank #4 (Sell).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.

Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which beat the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.

AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.

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