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Fresenius Medical (FMS) Q1 Earnings and Revenues Beat Estimates
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Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 28 cents, which beat the Zacks Consensus Estimate of 18 cents by 55.6%. The bottom line, however, declined 26.3% year over year.
Revenue Details
Revenues of $5.05 billion outpaced the Zacks Consensus Estimate by 1.3%. The company reported year-over-year revenue growth of 3% and 2% at constant currency (cc). On an organic basis, the figure moved up 2%.
Segmental Details
In the first quarter, Fresenius Medical reported through two segments — Care Delivery and Care Enablement.
Care Delivery revenues rose 3% on a year-over-year basis and 1% at cc. On an organic basis, the figure increased 2%.
Care Enablement revenues grew 3% year over year at cc, as well as on an organic basis.
New Operating Model
Fresenius Medical implemented a new operating model in the first quarter and started reporting under two new segments — Care Delivery and Care Enablement. This was a part of its transformation plan to return to a sustainable growth path.
Previously, the company used to report under Health Care Products and Health Care Services segments. The Care Delivery segment primarily consists of products earlier reported under the Health Care Services segment.
In the reported quarter, only 1.1% of Care Delivery revenues came from Health care products. Care Enablement generated more than 72% of its revenues from Health care products and the rest from Inter-segment sales — products that are transferred between the operating segments at fair market value.
2023 Outlook
Fresenius Medical maintained its outlook for revenues and operating income in 2023. The company expects revenues to grow at a low to mid-single-digit percentage rate. Operating income is estimated to be flat or decline by up to a high-single-digit percentage rate.
Fresenius Medical Care AG & Co. KGaA Price, Consensus and EPS Surprise
FMS exited the first quarter on a decent note. Its results reflected improving treatment volumes, as well as a stabilizing labor environment in the United States. A potential continuation of improvement in these two key factors will be beneficial for the company in the rest of 2023.
Overall price improvements also supported growth in the Care Enablement segment. While U.S. revenues continued to be hurt by FX impact, international sales improved.
Meanwhile, the company’s newly implemented operating model led to operational improvements. The bottom line was hurt by inflationary cost increases in energy, material and personnel. Although these headwinds are likely to improve over the year, the impact is yet to be seen.
What’s more, FMS recorded a partial reversal of an accrual related to a revenue recognition adjustment for accounts receivable in legal dispute for Care Delivery in the year-ago quarter. This was absent in the reported quarter, which led to a further decline in operating income.
Zacks Rank and Stocks to Consider
Currently, Fresenius Medical carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AmerisourceBergen Corporation , Merit Medical Systems, Inc. (MMSI - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
The company reported second-quarter fiscal 2023 adjusted EPS of $3.50, which beat the Zacks Consensus Estimate by 6.4%. Revenues of $63.46 billion outpaced the consensus mark by 4.4%.
AmerisourceBergen has a long-term estimated growth rate of 8.7%. ABC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%.
Merit Medical reported first-quarter 2023 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the consensus mark by 5.9%. The company currently carries a Zacks Rank #2.
Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.2%.
Cardinal Health reported third-quarter fiscal 2023 adjusted EPS of $1.74, which beat the Zacks Consensus Estimate by 17.6%. Revenues of $50.49 billion surpassed the consensus mark by 1.7%. The company carries a Zacks Rank #2 at present.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.
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Fresenius Medical (FMS) Q1 Earnings and Revenues Beat Estimates
Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 28 cents, which beat the Zacks Consensus Estimate of 18 cents by 55.6%. The bottom line, however, declined 26.3% year over year.
Revenue Details
Revenues of $5.05 billion outpaced the Zacks Consensus Estimate by 1.3%. The company reported year-over-year revenue growth of 3% and 2% at constant currency (cc). On an organic basis, the figure moved up 2%.
Segmental Details
In the first quarter, Fresenius Medical reported through two segments — Care Delivery and Care Enablement.
Care Delivery revenues rose 3% on a year-over-year basis and 1% at cc. On an organic basis, the figure increased 2%.
Care Enablement revenues grew 3% year over year at cc, as well as on an organic basis.
New Operating Model
Fresenius Medical implemented a new operating model in the first quarter and started reporting under two new segments — Care Delivery and Care Enablement. This was a part of its transformation plan to return to a sustainable growth path.
Previously, the company used to report under Health Care Products and Health Care Services segments. The Care Delivery segment primarily consists of products earlier reported under the Health Care Services segment.
In the reported quarter, only 1.1% of Care Delivery revenues came from Health care products. Care Enablement generated more than 72% of its revenues from Health care products and the rest from Inter-segment sales — products that are transferred between the operating segments at fair market value.
2023 Outlook
Fresenius Medical maintained its outlook for revenues and operating income in 2023. The company expects revenues to grow at a low to mid-single-digit percentage rate. Operating income is estimated to be flat or decline by up to a high-single-digit percentage rate.
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
Summing Up
FMS exited the first quarter on a decent note. Its results reflected improving treatment volumes, as well as a stabilizing labor environment in the United States. A potential continuation of improvement in these two key factors will be beneficial for the company in the rest of 2023.
Overall price improvements also supported growth in the Care Enablement segment. While U.S. revenues continued to be hurt by FX impact, international sales improved.
Meanwhile, the company’s newly implemented operating model led to operational improvements. The bottom line was hurt by inflationary cost increases in energy, material and personnel. Although these headwinds are likely to improve over the year, the impact is yet to be seen.
What’s more, FMS recorded a partial reversal of an accrual related to a revenue recognition adjustment for accounts receivable in legal dispute for Care Delivery in the year-ago quarter. This was absent in the reported quarter, which led to a further decline in operating income.
Zacks Rank and Stocks to Consider
Currently, Fresenius Medical carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AmerisourceBergen Corporation , Merit Medical Systems, Inc. (MMSI - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
AmerisourceBergen carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company reported second-quarter fiscal 2023 adjusted EPS of $3.50, which beat the Zacks Consensus Estimate by 6.4%. Revenues of $63.46 billion outpaced the consensus mark by 4.4%.
AmerisourceBergen has a long-term estimated growth rate of 8.7%. ABC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%.
Merit Medical reported first-quarter 2023 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the consensus mark by 5.9%. The company currently carries a Zacks Rank #2.
Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.2%.
Cardinal Health reported third-quarter fiscal 2023 adjusted EPS of $1.74, which beat the Zacks Consensus Estimate by 17.6%. Revenues of $50.49 billion surpassed the consensus mark by 1.7%. The company carries a Zacks Rank #2 at present.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 12.3%.