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Fresenius Medical's (FMS) Q2 Earnings Miss, Revenues Top
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Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 41 cents, which missed the Zacks Consensus Estimate of 45 cents by 26.7%. The bottom line declined 10.9% year over year.
Revenue Details
Revenues improved 2.6% year over year (in dollar terms) to $5.10 billion and outpaced the Zacks Consensus Estimate by 5.5%. The company reported revenue growth of 10% year over year and 1% at constant currency.
Segmental Details
In the second quarter, Fresenius Medical reported through two segments — Health Care Services and Health Care Products.
Health Care Services revenues rose 11% on a year-over-year basis and 1% at constant currency (cc). On an organic basis, revenues were flat.
Health Care Products revenues increased 6% on a year-over-year basis and 1% at cc. On an organic basis, sales improved 1%.
Fresenius Medical Care AG & Co. KGaA Price, Consensus and EPS Surprise
Revenues in the region rose 12% on a year-over-year basis and 2% at cc. On an organic basis, sales in the region remained flat.
EMEA
Revenues in this region increased 5% on a year-over-year basis and 7% at cc in the quarter under review. On an organic basis, sales in the region gained 6%.
Asia-Pacific
Revenues in this region advanced 6% year over year and 2% at cc in the reported quarter. On an organic basis, sales in the region rose 2%.
Latin America
Revenues in Latin America climbed 21% year over year and 17% at cc. Organic growth in the region was 18%.
2022 Outlook
Based on Fresenius Medical’s present projections, the company lowered its 2022 outlook. The company anticipates revenues to grow at a low-single-digit percentage rate compared to a low-to-mid-single-digit percentage rate previously.
The company now expects net income to decline at around a high teens percentage range compared to the previous expectation of growth at a low-to-mid-single-digit percentage rate.
Summing Up
Fresenius Medical exited the second quarter on a mixed note. The company benefited from revenue growth across North America, EMEA, Asia Pacific and Latin America regions. Strength in both Health Care Services and Health Care Products businesses in the quarter under review was encouraging.
However, the company’s earnings were hurt by significantly high labor costs that worsened during the quarter, resulting in higher-than-expected labor costs. Higher material and logistic costs in Health Care Products also impacted earnings growth. During the quarter under review, although the company witnessed COVID-19 excess mortality in line with its expectation, it remained on a high level resulting in continued need and costs for isolation clinics and shifts as well as personal protective equipment. The company faces intense competition in the field of health care services and the sale of dialysis products, which remains a concern.
Zacks Rank and Stocks to Consider
Currently, Fresenius Medical Care carries a Zacks Rank #3 (Hold).
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH stock has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.
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Fresenius Medical's (FMS) Q2 Earnings Miss, Revenues Top
Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 41 cents, which missed the Zacks Consensus Estimate of 45 cents by 26.7%. The bottom line declined 10.9% year over year.
Revenue Details
Revenues improved 2.6% year over year (in dollar terms) to $5.10 billion and outpaced the Zacks Consensus Estimate by 5.5%. The company reported revenue growth of 10% year over year and 1% at constant currency.
Segmental Details
In the second quarter, Fresenius Medical reported through two segments — Health Care Services and Health Care Products.
Health Care Services revenues rose 11% on a year-over-year basis and 1% at constant currency (cc). On an organic basis, revenues were flat.
Health Care Products revenues increased 6% on a year-over-year basis and 1% at cc. On an organic basis, sales improved 1%.
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 Quote
Geographical Growth
North America
Revenues in the region rose 12% on a year-over-year basis and 2% at cc. On an organic basis, sales in the region remained flat.
EMEA
Revenues in this region increased 5% on a year-over-year basis and 7% at cc in the quarter under review. On an organic basis, sales in the region gained 6%.
Asia-Pacific
Revenues in this region advanced 6% year over year and 2% at cc in the reported quarter. On an organic basis, sales in the region rose 2%.
Latin America
Revenues in Latin America climbed 21% year over year and 17% at cc. Organic growth in the region was 18%.
2022 Outlook
Based on Fresenius Medical’s present projections, the company lowered its 2022 outlook. The company anticipates revenues to grow at a low-single-digit percentage rate compared to a low-to-mid-single-digit percentage rate previously.
The company now expects net income to decline at around a high teens percentage range compared to the previous expectation of growth at a low-to-mid-single-digit percentage rate.
Summing Up
Fresenius Medical exited the second quarter on a mixed note. The company benefited from revenue growth across North America, EMEA, Asia Pacific and Latin America regions. Strength in both Health Care Services and Health Care Products businesses in the quarter under review was encouraging.
However, the company’s earnings were hurt by significantly high labor costs that worsened during the quarter, resulting in higher-than-expected labor costs. Higher material and logistic costs in Health Care Products also impacted earnings growth. During the quarter under review, although the company witnessed COVID-19 excess mortality in line with its expectation, it remained on a high level resulting in continued need and costs for isolation clinics and shifts as well as personal protective equipment. The company faces intense competition in the field of health care services and the sale of dialysis products, which remains a concern.
Zacks Rank and Stocks to Consider
Currently, Fresenius Medical Care carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the pharma/biotech sector include Lantheus (LNTH - Free Report) , ShockWave Medical (SWAV - Free Report) and Alkermes (ALKS - Free Report) . While Lantheus and ShockWave Medical sport a Zacks Rank #1 (Strong Buy), Alkermes carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH stock has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.